Doing business is not easy as it requires a lot of hard work, innovation, and resilience. Of all these things, one that has affected the entire industry most is innovation. Businesses that were able to come up with innovative ideas at the right time made it to the top of the table and those that couldn’t do it failed over time. This cycle can be understood with the help of disruptive innovation theory.
What Is Disruptive Innovation Theory
This theory was introduced by Professor Clay Christensen who claimed that it’s possible for a small business to defeat a market leader in any industry. According to this theory, it is not worth taking a huge risk for a company which is enjoying a market leadership position at this moment. It cannot go crazy behind innovation and risk its brand image. All it has to do is make incremental innovations like improvements in services & products. By this way, market leaders can make their products and services more sustainable over time and easily attract customers who are ready to pay more.
Even though there is nothing wrong in following this approach, after a certain point these innovative steps start to lose their effect on the market. Once that happens, customers switch back to cheaper products. This shift in consumer behavior reduces the profitability of market leaders. However, on the other hand, it gives the sudden boost the sales of small players which are already there offering same products at cheaper prices. That being said, if any small business intends to defeat the market leader at such a time, then it has to implement disruptive innovation without any further delay. If it can do so effectively, there are high chances that it will outrank market leader over time.
In order to implement disruptive innovation, young entrepreneurs heading startups have to keep on improving their products and services to attract more customers. Continuous promotion and engaging marketing ideas play a crucial role in this process.
As a small business owner, if you want to revolutionize the market, then keep in mind the points mentioned here and implement disruptive innovation effectively to attract the maximum number of customers in a hassle-free manner.