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Disruptive Innovation

In: Business and Management

Submitted By nikakb
Words 1112
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ENTRY 2,
DISRUPTIVE INNOVATIONS

In this essay I will describe and explain the causes and consequences of disruptive innovation. Firstly I will write about what dualism is, why it is important and how to achieve it. I will continue with describing difficulties, which may occur on a company’s path towards it, namely overshooting and inability to recognize the start of a new industry cycle. Further on, I will go deeper in the reasons, why incumbents fail to recognize the new entrants on the market, specifically “attack from below” and other discontinuous patterns of change. In the end I will describe some of the responses taken by established companies to disruptive technologies.

In today’s world when competition is such a big factor, organizations must face the paradoxical challenges of "dualism" to be able to compete in long term. Dualism means being able of functioning efficiently today while innovating effectively for tomorrow. To compete in the long term, every corporation must understand and manage both sets of concerns simultaneously. (Paap, Katz, 2004) If the companies do not manage to face the challenges of dualism, they make themselves potential victims of disruptive technologies.

Hence, achieving dualism means successfully surviving disruptive technologies. The first step a company has to make towards that is recognising them, but why it is so difficult for incumbents to recognise disruptive technologies?

A limitation companies face in process of achieving dualism is overlooking the emergence of new markets. In fact, even though managers spend a lot of time trying either to stay close to their customers or following their needs and improving products in order to satisfy them, they always focus on the mainstream costumers. On one hand, this attitude makes sense because it is related to taking care of the biggest existing market, the customers....

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