Theories of innovation in management and marketing - Theory of disruptive innovation

3 important questions on Theories of innovation in management and marketing - Theory of disruptive innovation

Theory of disruptive technology performance; time, start of the new technology point 1 figure

- New technology initially underperforms

- Lead customers of incumbant companies are not interested

- New technologies are first commercialized in small or emerging markets

 

Theory of disruptive technology; time, start of the new technology point 2 figure lines cross single crossing

- New technology improves and meets standsards of old technology
- New technology displaces the dominant one
- New entrant displaces dominant incumbant in mainstream market

What are the implications of disruptive technology theory

- New technologies are introduced by new entrants that initially focussed on smaller niche markets where the new technology
   can be developed further

- They may take-over the mainstream market after some time
- Large incumbent companies make rational decisions in that they follow lead customers but may loose in the long run if they
   blindstare on old technologies

- Profitable investments in new technology start at inflinction point (meting out something unpleasant)
- Mainstream companies may acquire companies that own the new technology at or just before that point

 

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