DISRUPTIVE

INNOVATION

®

Disruptive Innovation is a theory of competitive advantage that describes the circumstances in which entrants to a market can be structurally advantaged and consequently outcompete incumbents.

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The advantaged basis of competition is providing functionally-inferior but simpler and more convenient solutions at lower prices to less attractive (less willing or able to pay) or new customers.  The value proposition, resources, processes, and profit formula required are misaligned with incumbent organizations and solutions, affording asymmetrical advantage to entrants.

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Low-End Disruption involves serving the least-profitable and most-overserved customers at the low end of the existing value network with inferior but good enough performance (functionality) on the prevailing basis of consumption/ competition.

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New-Market Disruption involves converting nonconsumption by serving customers lacking the willingness or ability to pay or the knowhow to access incumbent solutions, and new contexts of consumption/competition and new performance dimensions result in new value networks.