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Disruption

12/2/2019

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Clayton Christensen is an HBS professor that coined the term "disruptive innovation".

​The theory

His theory states that disruption is made possible by low-end (read: cheap) or new-market footholds. Incumbents have little incentive to match prices with low-end disruptors since it would hurt their margins. This allows the disruptor to gain market share with little direct competition. Eventually, their product improves and becomes "good enough" for a large segment of the market. At this point it may be too late for incumbents to change course. Often the disruptor has developed new manufacturing or distribution methods (with the original goal of lowering costs) that make their strategy harder to imitate for the market leaders.

In my view, Christensen's theory focuses too much on price.

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