Disruption: The new normal ????

Disruption is the new normal. The term disruption sounds familiar to our ears now but it wasn’t that famous way back in 1997 when renowned HarwardBusiness School Professor Mr. Clayton M Christensen tossed the term Disruptive Innovation in his book ‘The innovator’s dilemma’. He described Disruptive Innovation as something innovative that a company does, either in its business model or with its offerings, at the low-end of any market. Once it is able to mark its strong presence there, then it moves up the ladder and challenges the other prominent players in the segment.

As per Christensen, a disruptive innovation starts as an experiment early and then heads towards making the current business model obsolete. Disruption is also not confined or limited to large corporations only. It can be easily exercised by small/new companies. He also described the difference between disruptive innovation and sustainable innovation. While the later focuses on improving the existing products, the former focuses on serving existing/new customers with new products in a new manner notably using the cutting edge technology.

The element of disruption is not necessarily found in the product or the way it is being promoted. The true essence of disruption is widely found in the business model itself.

Disruptive Innovation theory suggests a business model will be considered to be disruptive only when:

·         It originates in low-end new-market footholds.

·         It makes the product accessible to large masses.

·         Disruptive innovations are considered inferior by most of the customers.

·         Customers wait till the quality level rises and adopts the product only when the product’s quality reaches the preset benchmark for them.

·         Future competitors tend to write off the disruptive products as low quality initiative.

·         The business model allows the company to serve its target customers radically cheaper than competitors or

·         The business must create a whole new market and hence should convert non customers into customers.

A business model, marketing campaign can only be considered Disruptive only when it satisfies the conditions given above. Considering the requisites discussed above Prof. Clayton stated that business models like what Uber follows can’t be stated as disruptive because of the following two reasons:

·         Uber doesn’t provide a cost effective offering to its customers, infact it focuses on the high valued customers only.

·         As per Prof. Clayton an Ideal disrupt or starts with low quality services and eventually captures the mainstream market by improving quality.

Prof. Clayton contrasted disruptive innovation with sustaining innovation, which simply improves existing products. Personal computers, for example, were disruptive innovations because they created a new mass market for computers; previously, expensive mainframe computers had been sold only to big companies and research universities.

Disruption can be multidimensional. The theory started with Disruptive innovation where the author talked about business models and products and then the theory of Disruption was applied to marketing as well.

Some classic Disruptions are:

·         Classified ads (Craigslist)

·         Long distance calls (Skype),

·         Record stores (iTunes),

·         Research libraries (Google),

·         Local stores (eBay),

·         Netflix took a more radical move, switching away from its old business model (sending out rental DVDs by post) to a new one (streaming on-demand video to its customers).

Disruption will set new trends and benchmarks and will change the market like never before. The thing to watch here is how customers will get benefited out of it.