How Disruption can Impact Businesses At Large

Disruptive innovation is the type of innovation that offers a new market or value that disrupt an already existing market. Through this process, an underrated product or service initiates to grow in popularity, displace and finally replace an existing player or market leader. The term was first coined by Clayton Christensen back in 1995.

The modern age has witnessed an immense rise of fast and agile startups that have displaced large businesses in a quick succession of time. You will be amazed to know that most of the larger companies, including many in the Fortune 100 group lasted for more than 50 years at one point in time, however now the lifespan of a large public-listed company is almost ten years on average. Besides, some of the technological solutions such as contemporary till systems have also come into play while shaping various sectors.

One of the reasons for the aforementioned fact is the disruption of the small businesses and which is undoubtedly very massive. Generally, disruption occurs when smaller and more enthusiastic startups make the most of new technologies to completely transform the way an industry works. While being completely different from the existing organisational structures and capital investment, they have initiated a clean sheet of paper and that is why they can easily take risks when it comes to changing the dynamics of the industry. On the contrary, larger companies usually find it difficult to respond owing to the outdated ways of working, conventional systems and also reluctance to change.

According to Christensen, disruptive innovation happens when a technological innovation creates newer markets via exploring new kinds of customers. It means that every disruptor is an innovator, but not every innovator is a disruptor.

In the normal scenario, executives comprehend that technology is striving to disrupt their businesses and they try to find means to develop that technology internally or buy it from others. Most of the auto industry giants such as GM and Ford are good examples. These companies have spent whopping amounts to buy and then establish electric and autonomous driving technologies.

There are certain other things that are worth considering as well and one of the crucial things in that regards is that if the disruption threat is coming from a startup, there are maximum chances that the incumbent often tries to acquire it and if the valuation is low enough, it is more likely that they will also try to compete with the startup on price, as a measure to block their advance. In the majority of the cases, neither of these responses worked as desired.

There is also a point that most of these companies have missed and which is that most pervasive pattern of disruption is driven by consumers. They are the major reason behind the decisions to reject or adopt new innovations, technologies, and new products. When big

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