module 2 - Disruptive Innovation Flashcards
What is disruptive innovation?
Disruptive innovation refers to innovations that initially serve niche or underserved markets but eventually disrupt mainstream markets.
What is sustaining innovation?
Sustaining innovation refers to improvements made to existing products or services that help established firms maintain or grow market share.
What is the Innovator’s Dilemma?
The Innovator’s Dilemma refers to the dilemma faced by incumbents on whether to invest in disruptive innovations that may cannibalize their existing business.
What are two types of disruption?
Low-end disruption and new-market disruption.
What is the key difference between low-end disruption and new-market disruption?
Low-end disruption targets underserved customers with lower-quality cheaper products, while new-market disruption creates new markets by addressing non-consumption.
Why do incumbents often fail to react to disruptive innovations?
Incumbents often overlook disruptions because disruptive innovations initially target niche or less profitable markets making them seem unthreatening.
What is the role of technological triggers in disruptive innovation?
Technological triggers like the internet or 3D printing create new opportunities for innovators to serve underserved or non-served markets.
Why did Kodak fail to adopt digital photography despite inventing it?
Kodak feared digital photography would cannibalize its highly profitable film business.
What does ‘creative destruction’ mean in the context of innovation?
‘Creative destruction’ refers to the process where new innovations cause old industries or technologies to become obsolete.
What is the S-curve in the context of disruptive innovation?
The S-curve represents the lifecycle of a technology showing phases of slow initial growth rapid improvement and eventual plateau.
What was the major lesson from Kodak’s failure with digital cameras?
Cognitive biases and unwillingness to cannibalize the core business can lead to failure in adopting disruptive innovations.
How do mini-mills serve as an example of disruptive innovation?
Mini-mills started by producing lower-quality steel for less profitable markets but eventually disrupted integrated steel mills by improving product quality.
What is the importance of the ‘customer expectation trajectory’ in innovation?
It represents the performance improvements that customers expect over time which can be outpaced by disruptive innovations.
What lesson can incumbents learn from successful companies dealing with disruption?
Successful incumbents balance exploitation of current markets with exploration of disruptive opportunities.
What are two strategies for incumbents to address disruptive innovations?
Acquiring a disruptor or creating an autonomous unit focused on disruptive innovation.
