Question

Identify a disruptive innovation. What was it and how did it change its industry. A healthcare example is preferable, but not necessary.

Answer 1

By refining Danneels, Markides, and Tellis' definition, a disruptive innovation is defined here as “an innovation that changes the performance metrics, or consumer expectations, of a market by providing radically new functionality, discontinuous technical standards, or new forms of ownership.”

Fundamentally, a disruptive innovation is a low-cost alternative to existing services that arises via market forces when firms focus on "sustaining innovations" that eventually overshoot the needs of average consumers. Technology is often involved in disruption—where it facilitates a lower-cost business model.

An innovation that does not significantly affect existing markets. .In business theory, a disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market-leading firms, products, and alliances.

Examples include personal computers, the Kodak camera, and Google advertising. They used disruption to transform markets that had been dominated by complicated, expensive services and products into simple and affordable ones. Disruptive innovations are the key to ushering in affordable health care.