First coined by Clayton M. Christenson, Disruptive Innovation refers to developing low-cost, breakthrough products or solutions that are easily accessible to a larger population and cater to their needs. These products brought about as a result of disruptive thinking disrupt the established companies and overthrows market leaders, creating a new market and value network. Disruptive products or solutions have the defining characteristics of smaller target markets in the beginning, lower gross margins, and more simplified products or services than their industry contemporaries.
Here is a checklist of some leading examples of disruptive innovation companies:
Netflix and Video Streaming Started as a DVD mailer and getting some initial success, the founders of Netflix decided to turn their business model upside down. They started to stream their media and facilitate their target audience to get on-demand viewing of their favorite movies and serials without annoying commercials. People can watch movies and shows on their preferred schedules.
Purple and Mattress Sale Purple transformed the mattress industry by changing the established business models upside down. Terry and Tony Pearce–the founder brothers designed a high-tech mattress and considered reaching the consumers directly without any need of distributor and retail support. These mattresses offer the best-in-class spinal support and come at a price that anyone can afford. Its direct-to-consumer model and offering mattress for up to 100 nights before asking for a refund made this a truly disruptive business model.
Amazon Amazon has transformed the way we shop products online. Started as an online bookseller, the e-commerce giant moved into music, sports, retail, and other ventures. With its ability to deliver products faster at a low cost with its supply chain logistics, Amazon, with its disruptive thinking, has overthrown many established market leaders. Its recent foray in pharmacy is giving earlier signs of it disrupting groceries, small business lending, logistics, payments, and pharmacies in coming years.
Airbnb Airbnb is another fine example of a disruptive innovation company as it promoted Peer-to-Peer (P2P) accommodation. It allows homeowners to rent their apartments, villas, and farmhouses to local and foreign tourists and thus earn money. Started as a low-end rooms’ supplier, it now offers luxury villas. It has disrupted the travel vendors and traditional hotel service providers. This emerged as a disruptive brand that offers benefits to travelers worldwide and homeowners and hotel owners.
Apple Started as a computer company, Apple started a campaign—“Think Different” that ran as an advertising slogan from 1997-2002. The company launched iMac and iPod and launched its first iPhone in January 2007. With the mass production of iPod and iPhone, Apple inc. changed the way people used technology. The company showcased what applying disruptive thinking in your business can do for your business and clients.
With the advent of new technologies and evolving customers’ demands, technological innovations have helped companies to fulfill people’s requirements and provide the maximum value.
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