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December 1, 2023, vizologi

Classifying Change: What Are the 2 Types of Disruptive Innovations?

With the ever-evolving business landscape, change is not only inevitable, but it’s also a vital component for survival and growth. The nature of these changes and their subsequent implications can differ dramatically based on various factors including the type of innovation. This comprehensive article will delve into the exploration of two notable forms of disruptive innovation – sustaining and disruptive innovation.

Each having their unique impacts and methodologies, they provide valuable insights into the dynamic business environment prevalent in today’s volatile and competitive market.

A Closer Look at The Concept of Sustaining Innovation

Sustaining innovation is centered on addressing the needs of existing customers by developing superior products aimed at scaling up revenue. This method manifests when a technology company, for instance, rolls out an updated version of its popular smartphone loaded with enhanced features and capabilities, serving as prime example of sustaining innovation.

Other embodiments of this type of innovation can be seen when a beverage manufacturer revamps its package design or introduces a new flavor, adding a fresh spin to their established line of products.

Comprehending the Essence of Disruptive Innovation

Disruptive innovation branches into two distinct types. The first kind involves a company unsettling the existing stable market by turning its focus onto the less profitable segments. This strategic shift compels dominant companies to relocate to more lucrative market segments, eventually sidelining them from the competition. A relatable example is observed when budget airlines disrupt the established airlines by catering to budget-conscious travelers.

The second variant of disruptive innovation is the introduction of technological shifts that drastically revamp industries. The replacement of traditional cable TV by on-demand streaming services evidences this. Incorporating these variations of disruptive strategies becomes crucial for companies to stay competitive in the rapidly altering marketplace.

Drawing Parallels Between Sustaining and Disruptive Innovation: An In-depth Study of Their Unique Characteristics

Exploring Their Impact on Quality and Performance

Disruptive innovation plays a pivotal role in influencing a product’s quality and its performance metrics. Despite sustaining innovations consistently augmenting feature upgrades, disruptive progressions tend to trigger ground-breaking advancements that invariably push companies to morph their approach towards product development and evolution.

For instance, the introduction of digital cameras revolutionized photography through instant previews, high-resolution image quality, and seamless photosharing. Concurrently, the launch of electric vehicles offering enhanced performance, reduced carbon emissions, and an escape from fossil fuel dependency; depict the immense potential of disruptive innovation.

Identifying the Core Audience

Disruptive innovation hinges on a deep understanding of the unique needs and preferences of the target customers, thereby facilitating effective market disruption. For instance, disruptive revolutions addressing the fast-food industry may pivot toward offering healthier alternatives in response to the rising demand for balanced meals. By focusing on this under-addressed market, such an innovative firm can captivate health-conscious consumers, potentially drawing customers away from competitors.

Implications on the Business Model

The impacts on a business model sharply highlight the differences between the two types of disruptive innovations. While sustaining strategies aim at enhancing the product offerings for existing customers with a goal to boost profitable margins, disruptive versions involve smaller companies unseating established companies by targeting niche, less profitable market segments, consequently compelling them to compete in higher market segments and eventual fade-out.

Unfolding Disruptive Innovation: A Detailed View on the Two Types

Sustaining innovation mainly focuses on retaining customers and scaling up profit margins through improved product line-up. A smartphone company rolling out updates or more advanced versions of their models exemplifies this. Conversely, disruptive innovation occurs when a visionary firm disrupts a settled business model by targeting underserved or niche market segments. An instance of this is seen when a budget airline introduces competitively priced fares to cater to cost-sensitive travelers.

The Significance of Disruptive Innovation

Disruptive advancements pose a formidable challenge to incumbent companies by spotlighting less-profitable market segments. The ascent of digital photography, which usurped the traditional film photography industry, serves as a model illustration. Similarly, the entertainment industry too witnessed a seismic shift with the advent of online streaming as a formidable alternative to traditional modes of viewing.

Real-World Illustrations of Disruptive Innovation

Tangible illustrations of disruptive innovation mirror its widespread prevalence across varied industries. The rise of online streaming platforms causing a significant disruption in the television industry to the emergence of ride-sharing apps that disrupted the traditional taxi business – disruptive innovation has, unquestionably, transformed the modus operandi of various industry segments, aptly catering to evolving consumer expectations.

Exploring Potential Use Cases of Disruptive Innovation across Diverse Commercial Sectors

Disruptive strategies have the potential to create lasting impacts across a wide array of sectors. An instance of this is when ride-sharing services disrupted regular taxi services by offering a more convenient, budget-friendly commute option. Another notable example is telemedicine, which has dramatically reshaped patient care through remote consultations, thereby posing a direct threat to the standard care model.

Breeding a Disruptive Mindset for Innovation

Fostering a disruptive mindset essentially involves striking a balance between implementing sustaining and disruptive strategies. This judicious blend helps businesses evade disruption and aptly respond to fluctuating market dynamics, fostering continuous evolution and growth for the company.

Strategic Approaches to Gain a Comprehensive Understanding and Experience in Disruptive Innovation

Achieving a comprehensive understanding and gaining experience in disruptive innovation requires a multipronged approach. Businesses need to cultivate a culture of in-depth research, stress on experimentation, promote collaboration, improve customer engagement and endorse a diversified workforce. Disruptive innovation goes beyond just product development; it necessitates challenging the status quo and redefining existing business strategies.

Employing these techniques will aid firms in staying adaptive and responsive to market changes and shifts.

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