In the early concept of innovation concept, depending on the degree of innovation and the effects it produced, it can be divided into two types, the incremental innovation and disruptive innovation. The incremental innovation refers to a natural innovation process step by step in the lifecycle of a product in the process of technology evolution, in accordance with the original technology path; the breakthrough innovation refers to a product’s life cycle jumped to another life cycle in the process of technology evolution. Incremental innovation and breakthrough innovation can be called sustaining innovation, these are two normal innovation process of products.
A disruptive innovation is an innovation which enables a product create a new market and value chain, and ultimately undermine the existing, stable market and value chain, replacing the previous technology. The term was firstly used in business and technology aspects, it enhanced the product and service quality with an unexpected way, generally it attracted the targeted consumers who are in the new market, and secondly it achieved its “undermining” effect through a substantial price reduction. The founder of this theory is Clayton M. Christensen, a professor at Harvard Business institution. He invented the “innovator Dilemma” theory, which means that the wise decision made the innovator into a dilemma situation instead of the bad decision. These decisions have brought companies huge success, and they kept following these business models because of these previous successes, so instead of catering to the disruptive innovation, so that they are eliminated by the new entrants.
The models of disruptive innovation
1. Low-end disruptive innovation: Instead of opening new market, it is often related to low quality and service, it reduces price with deep analyzing the customers’ preference and retain the
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