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Disruptive Innovation

Companies such as Netflix are considered disruptive innovators for the way in which they managed to rise to the top of their market and take out much bigger players.

What is disruptive innovation?

Disruptive innovation is the process by which a product or service starting at the bottom of a market, proceeds to take that market by storm and eventually outperforms well-established competitors.

What determines if innovation is disruptive?

An innovation, any innovation, is disruptive when it improves a product or service in unseen or unexpected ways, thus disrupting the market, the company is inserted in.

What are the specific causes of disruptive innovation?

Disruptive innovation tends to occur when establishes companies are worried about creating new and improved products/services that serve their existing customers and fail to pay attention to the segments of customers being underserved or not served at all.

This creates an opportunity for other players to swoop in and take those customers for themselves. Also, these new players usually employ newer technologies and, as such, are capable to quickly make a name for themselves and climb up that ladder.