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Uwiduhaye Joselyne
Dec 2, 2023

What is theory of disruptive innovation?

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ChatGPT
Dec 2, 2023
The theory of disruptive innovation, coined by Clayton Christensen in 1997, explains how new technologies or business models can disrupt existing markets and industries. According to this theory, disruptive innovations initially target niche markets or underserved customers with lower performance or lower-cost alternatives. Over time, these innovations improve and eventually surpass the existing products or services, leading to the displacement of established companies and their offerings.

Disruptive innovations often start at the bottom of the market, appealing to customers who are not being served by the mainstream products or services. They may offer simpler, more convenient, or more affordable solutions that attract these customers. As the disruptive technology or business model improves, it gains traction and starts to compete directly with the established players in the market.

The theory of disruptive innovation highlights the importance of understanding customer needs and the potential for new technologies or business models to disrupt existing industries. It suggests that established companies often fail to respond adequately to disruptive innovations because they are focused on serving their existing customers and improving their existing products. This creates an opportunity for new entrants to disrupt the market and gain a competitive advantage.

However, disruptive innovation is not always successful. Established companies can also adapt and respond to disruptive threats by investing in research and development, acquiring or partnering with innovative startups, or creating their own disruptive offerings. The theory of disruptive innovation provides a framework for understanding the dynamics of market disruption and the strategies that companies can employ to stay competitive in the face of disruptive threats.
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