A Disruptive innovation is one that changes the basis of competition in an industry – for example in watches, Swatch change the basis of competition from accuracy to fashion. A sustaining innovation is one that perpetuates the current dimensions of performance – for example, Intel developing faster and faster chip speed.
Clayton Christiansen write a whole book about the fundamental differences between these two innovations. His theory states that incumbents win in sustaining innovations, because they are highly motivated to win these battles with innovations that appeal to their most valuable customers, tend to be higher margin, fit with their existing ‘value network’ and match the ‘mental model’ they have built about how their industry works.
On the other hand, good managements are likely to be tripped up by disruptive innovations, since none of the above apply.
When is it useful?
This insight has extensive implications for anyone developing a strategy to attack an incumbent, or as an incumbent seeing a potentially disruptive technology on the horizon.
How do you do the analysis?
I want to know more
Innovators Dilemma and Solution, Clayton Christiansen
How can you adapt this concept?