Disruptive Innovation:
Understanding its Impact in Today's Business World

Disruptive innovation is a term that was first coined by Clayton Christensen in 1997. It refers to a type of innovation that creates a new market and value network, ultimately disrupting an existing market and displacing established market leaders. In this article, we will explore the concept of disruptive innovation and provide examples of how it has been used in various industries.

1. What is disruptive innovation?

Disruptive innovation is a type of innovation that creates a new market and value network. It usually starts by targeting a small, niche market and then gradually expands to displace established market leaders. Disruptive innovations typically have lower performance and functionality than existing products, but they are cheaper and more accessible to a wider audience. As a result, they can disrupt and eventually overtake the existing market.

2. Examples of Disruptive Innovation

  • Uber, which disrupted the taxi industry by creating a new, more convenient, and less expensive way for people to get around.

  • Netflix, which disrupted the traditional TV and movie distribution model by creating a subscription-based streaming service.
  • Airbnb, which disrupted the hotel industry by creating a new way for people to find and book accommodation.

3. Impact of Disruptive Innovation

Disruptive innovation has a profound impact on the business world. It can create new markets and opportunities, while also making existing products and services obsolete. Disruptive innovations can also create new ways of doing things, which can lead to increased efficiency and cost savings. However, disruptive innovation can also lead to the failure of established companies that are unable to adapt to the changing market.

4. Disruptive innovation and Business Models

Disruptive innovations often require a new business model, which is different from that of existing market leaders. For example, Uber and Airbnb, both operate based on the sharing economy model, which allows people to share their resources and services with others. This is different from the traditional business models of the taxi and hotel industries, respectively.

5. How to spot disruptive innovation

Spotting disruptive innovation is not easy but keeping an eye on new technologies and changes in customer preferences, as well as being open to new business models can help companies identify new opportunities. Additionally, it's important to pay attention to new market entrants and to track their progress to see if they are making inroads into established markets.

6. How to respond to disruptive innovation

The key to responding to disruptive innovation is to be proactive. This means anticipating changes in the market, and being willing to experiment with new technologies, business models, and approaches. Companies should also invest in research and development and focus on staying agile and adaptable.


Disruptive innovation is a powerful force in the business world, capable of creating new markets and opportunities, while also making existing products and services obsolete. Companies that want to stay ahead of the curve should pay attention to new technologies, changes in customer preferences, and new market entrants. By being proactive and experimenting with new technologies, business models, and approaches, companies can position themselves to take advantage of disruptive innovation and emerge as market leaders.

It's important to keep in mind that Disruptive innovation is unpredictable and most companies are caught off guard by it. However, companies that are able to identify and take advantage of disruptive innovations will be well-positioned for success in the future.

Curious about what new technologies might have disruptive effects? Then be sure to read our white paper on tech trends. Want to brainstorm together? Don't hesitate to contact Stretch Innovation.
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