Disruptive Innovation: Christensen
Introduction
Christensen, Anthony & Roth (2004) categorise types of innovation as either sustaining or disruptive and further sub-categorise disruptive innovations as ‘low-end’ and ‘new-market’. Christensen et al further define each type of innovation and provide some useful illustrative examples of each:

    1) Sustaining innovations: improvements to existing products on dimensions historically valued by customers that move companies along established improvement trajectories (e.g. airplanes, computers, batteries);
    2) Disruptive innovations – ‘low end’: existing products and services ‘overshoot’ customer needs leaving room for low-priced basic products and services (e.g. Dell computers, Wal-mart);
    3) Disruptive innovations – ‘new-market’: occur where characteristics of existing products or services limit the number of consumers. Disruptive innovations bring consumption to previous ‘non customers’ (e.g. teeth whitening, telephone).

Christensen et al argue that “existing companies have a high probability of beating entrant attackers when the contest is about sustaining innovations. But established companies almost always lose to attackers armed with disruptive innovations”

Alongside the theory of Disruptive Innovation, Christensen et al (2004) introduce the theory of Resources, Processes, and Values (RPV), in which they argue that:

    “organizations successfully tackle opportunities when they have the resources to succeed, when their processes facilitate what needs to get done, and when their values allow them to give adequate priority to that particular opportunity in the face of other demands that compete for the company’s resources”

They also explain how RPV causes incumbent organisations to almost always be successful in competition based on sustaining innovation, but nearly always fail in the face of disruptive innovation (Christensen et al, 2004).

Christensen et al (2004) describe what disruptive innovations do (“create new markets or reshape existing markets”), define three important customer groups (overshot, undershot and non customers) and explain how the needs of each group give rise to the potential for disruptive innovation, and use Resources, Processes, and Values theory to explain why incumbent organisations almost always fail in the face of disruptive innovation

Examples of disruptive technologies
internal-combustion engines vs. horses and humans (for powering machines)
automobiles vs. horses (for transport)
minicomputers vs. mainframes
desktop publishing vs. traditional publishing
digital photography vs. chemical photography
personal computers vs. minicomputers, workstations
Music downloads and file sharing vs. compact discs
ebooks vs. paper books
e-commerce vs. physical shops

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