Wise thoughts on distruptive innovation
News you want to use week 5.
Clayton M. Christensen is best known for his theory of disruptive innovation, in which he warns large, established companies of the danger of becoming too good at what they do best. To grow profit margins and revenue, he observes, such companies tend to develop products to satisfy the demands of their most sophisticated customers. As successful as this strategy may be, it means that those companies also tend to ignore opportunities to meet the needs of less sophisticated customers — who may eventually form much larger markets. An upstart can therefore introduce a simpler product that is cheaper and thus becomes more widely adopted (a “disruptive innovation”). Through incremental innovation, that product is refined and moves upmarket, completing the disruption of the original company. Enjoy some of Christensens most popular contributions linked to this post.
Editor’s note: Clayton Christensen passed away on Jan. 23, 2020.
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