#How can innovation affect ways of life how to#
#How can innovation affect ways of life drivers#

Instead, they want to maintain their share prices and focus on the most profitable customer segments.ДЄccording to Strategic Readiness and Transformation Survey, executives in general may be overconfident in their ability to respond to disruption. In other words, they arenвЂ™t used to considering their initial efforts at commercializing a disruptive technology as learning opportunities. This often means that the best performing companies have well-developed systems for killing ideas their most profitable customers arenвЂ™t willing to pay extra for.Д¬reating disruptive innovation involves bigger risks and incumbents donвЂ™t necessarily have a plan for failure.

Happens slowly at first until reaches the mainstream after which grows exponentiallyДЄccording to Christensen, one of the reasons why building disruptive innovation is challenging for large organizations is because these companies depend on customers and investors for resources.

Often involves new technology and/or a new business model.

Sales arguments and measures of value are usually fundamentally changed.

Either disrupts an existing market or creates a new market segment in the existing one.

Lower margins, at least in the beginning.

In addition, product development takes time and requires multiple iterations, which makes catching up quite unlikely, even with the additional resources the incumbent has at its disposal.Д¬haracteristics of disruptive innovation: Responding to the new competition solely with new technology often isnвЂ™t enough as the market entrant has had a lot of time to refine the offering and business model. At that point, however, itвЂ™s often too late since the new entrant is on the exponential part of the S-curve. Once the disruptive innovation enters the mainstream, the established companies typically pick up on the new concept or technology to respond to the competition. The value of disruptive innovation to the mainstream and high-end customer segments is minimal at this point, at the bottom of the S-curve. Although the new entrant might use significantly more advanced technology in their product, the mainstream and high-end customer segments rely on the established provider. When buying a new phone, for example, rational consumers often buy a brand theyвЂ™re familiar with. When disruptive innovation first enters the market, it initially caters only to a small and typically not very profitable customer segment, while established organizations are focused on serving more demanding, high-end customers.Д«ecause the more demanding customer segment is the one with higher profits, established companies usually choose to focus on serving the more profitable customer segment. In the beginning, disruptive innovation is inferior to the existing products and services in the market measured by traditional value metrics. The concept of disruptive innovation was first defined by Harvard Business School professor Clayton Christensen in a HBR articleВ and introduced in more detail later in his book called InnovatorвЂ™s Dilemma. Typically, a new player enters an existing market with new technology or business model (or a combination of these two), providing new kind of value that differs from the incumbent's offerings.Дisruptive innovation is one of the four types of innovations in the innovation matrix.

#How can innovation affect ways of life drivers#

In practice, disruption happens when traditional value drivers in an existing market are significantly changed.

In addition to explaining what disruption means and how you can prepare for it, weвЂ™ll also introduce some of the most significant examples of disruptive innovation for you to see how disruption works in the real world.

In this post, weвЂ™ll help you take advantage of these changes and prepare for the future.

Thus, itвЂ™s important for companies not to miss opportunities to adapt. This means that thereвЂ™s a new, even bigger wave of innovation ahead of us and virtually every industry will be affected by this change вЂ“ one way or another.ДЄpproximately half of the S&P Fortune 500 companies are said to be replaced in the next decade because of disruption. In the age of innovation, new solutions can be built on top of existing technologies faster than ever before.

WeвЂ™re currently living in a world of endless choices and opportunities where new products and services are launched at an ever-increasing pace. With that in mind, weвЂ™ve written this post to help you understand what disruptive innovation is all about and how you can approach it in practice.

#How can innovation affect ways of life how to#

However, only few understand what it actually means or how to create it. We hear the mainstream media talking about disruption daily.