invented entirely new services or products ; new business model ; incumbent, or companies, irrelevant
Clayton Christensen often named as the father of the term disruptive innovation, defined two types of invention in his famous 1995 Harvard Business Review article “Disruptive Technologies: Catching the Wave” (Bower and Christensen, 1995): The first type of innovation, also called “business as usual” entails simply improving the existing systems, structures, and established ways of doing things. The organization’s services, products, procedures, structures, and identity remain the same. This type of innovation is called sustaining innovation because it sustains business as usual. The second type of innovation described by Christensen is disruptive innovation. He identified a wide range of cases where competitors caught out companies. The competitors had invented entirely new services or products with a new business model that made the incumbent, or “business as usual” companies, completely irrelevant. Common examples of disruptive innovation are Amazon, which disrupted the book-selling industry, and Netflix, which disrupted Blockbuster. It also exists in the scientific world: Genentech was also a disruptive company (now belonging to Roche). They disrupted the pharmaceutical landscape by introducing new biotechnology, e.g., cloning genetically engineered DNA in foreign cells and mass-producing the resulting drugs. (Leuty, 2016)
Bower, Joseph L. and Clayton M. Christensen. “Disruptive Technologies: Catching the Wave.” Harvard Business Review, January–February 1995.
HBR