Theory of Disruption

Disruptive innovation was coined by Clayton Christensen and describes a new product that replaces an older product because of factors like efficiency, effectiveness, easily accessible, affordable, etc.  Christensen states that “an innovation that is disruptive allows a whole new population of consumers access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill”. 

The examples given include:

·      The “disruptee” being four-year colleges that may be too expensive and not as convenient for people to access, but the “disruptor” or the disruptive innovation being community colleges that are fairly inexpensive compared to a four-year college.

·      The “disruptee” being fixed line telephones that can only be used at home, where the “disruptor” or disruptive innovation being cellular phones that can be used pretty much anywhere and are a lot more convenient.

“Characteristics of disruptive businesses, at least in their initial stages, can include:  lower gross margins, smaller target markets, and simpler products and services that may not appear as attractive as existing solutions when compared against traditional performance metrics”.  

Some disruptive innovations that we see today include the innovation of Netflix or Redbox.  The “disruptee” being Blockbuster or Hollywood Video, where these companies were more expensive and not very accessible.  The “disruptor” being Netflix, that is easily accessible over the internet and through the U.S. mail system, or Redbox that is easily accessible at grocery stores, 7-11’s, and common places that you would travel during your daily routine.  Not to mention these “disruptors” were much cheaper than Blockbuster or Hollywood Video.

One situation that I see in the school systems are the newly innovations of tablet computers, like the iPad or products like the Kindle that are giving schools a new and possibly more efficient way to replace textbooks.  Currently, it is often times cheaper to buy a digital version of textbooks for college classes, versus buying the actual book itself.