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Disruptive Innovation - Essay Example

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In the model of cloud computing there includes compilation of data center possessed and maintained by a third party and data and computation are operated somewhere else. In case of cloud computing hardware system software and applications are executed via internet…
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Disruptive Innovation
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"Disruptive Innovation"

Download file to see previous pages The new entrants come up with new innovative hard disks that could not be used by the customers because of little raw performance. The innovations that leads to something unique and move out of the traditional market, making it a nontraditional one, despite of various limitations that make it unattractive to the mainstream is termed as Disruptive innovation. In short, present players in the market wins the battle by sustaining innovation but new entrants win the battle by disruptive innovations (Anthony, 2008, p. 4). Straining strategy leads to influence or shape the market in which one competes whereas disruptive strategy “redefine the market, create a new one and defend against attacks from below” (Anthony, 2008, p. 5). Historically companies have succeeded in using sustained innovations at a market with higher tier by charging the uppermost price from sophisticated and demanding customers. In this way, the company achieves profit. This in turn opens the door for Disruptive innovations. A disruptive innovation helps the consumers at the bottom of the market to access such products that were previously accessible to only those customers who had lots of money and skill. The characteristics of disruptive innovation include “lower gross margins, smaller target markets, and simpler products and services” (Disruptive Innovation, n.d.), which may appear not so attractive to the existing solutions when compared with the traditional ones. These innovations offers the market with a lower gross margin making it less attractive for the firms moving upward and making space for the new competitors. Thus having a brief idea about the disruptive innovation as exhibited by Christen, some further elaborations about the model of disruptive innovation is required. This study deals in selecting a sector where any type of disruptive innovations has taken place. Assessing the response of the companies and finding the factors responsible for such response and the correlation with the model developed by Clayton Christensen. The sector which is taken in this paper for analysis is cloud computing technology. But before moving into the detailed explanations, a brief knowledge about cloud computing procedure needs to be discussed in a clear manner and the model developed by Christensen can be explained. 2. Christensen model of disruptive innovation The model of disruptive innovation by Clayton Christensen is basically a hypothesis which can be generally exploited for the purpose of explaining the impact of new technologies on the existence of a firm. The term disruptive innovation was first coined by Clayton Christensen in the year 1997 in his book named, “The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail". It has been seen that time and again associated with the failure or displacement of the organizations from their respective industries the organizations “could see the break coming, merely did nothing until it was excessively late”. Through doing well, the companies are alleged to do and they actually provide to their most profitable customers and highly concentrate on the investments in areas where the profit margins are majorly attractive. This situation generates due to the resourcefulness allocation processes of the constituted ...Download file to see next pagesRead More
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