What is low end disruption?

Low-end disruption refers to businesses that come in at the bottom of the market and serve customers in a way that is “good enough.” These are generally the lower profit markets for the incumbent and thus, when these new businesses enter, the incumbents move further “upstream.” In other words, they put their focus on …

What is disruption in a market?

A market disruption is a situation wherein markets cease to function in a regular manner, typically characterized by rapid and large market declines. A market disruption is an example of a an inefficiency and is also known as a market failure.

What are the types of disruption?

Be on the lookout for these five types of willful disruption:

• Offense (innovation): Pushing others out of the way.
• Defense (competition): Counteracting the disruption in response to a missed opportunity.
• Serendipity (chance): Discovering things you didn’t know would be of value to you.

Is Tesla a low end disruption?

Christensen is an exponent of “low-end disruption,” whereas Tesla is an object lesson in “high-end disruption,” the concept that innovation can begin at the high end of a market and later trickle down to the mainstream. It takes many iterations & vast economies of scale to achieve mass market affordability.”

What are signs of an overserved market?

Overserved customers consume a product or service but don’t need all its features or functionality. Three specific indicators point to this customer group: People complaining about overly complex, expensive products and services. Features that are not valued and therefore are not used.

What are the 4 things that causes business disruption?

Most Common Business Disruption Examples

• Adverse Weather. Over the last few years, several major weather conditions have made national news.
• Information Technology or Telecommunications Outage.
• Transport Network Disruption.
• Earthquake or Tsunami.
• Loss of Talent and Skills.

Is Tesla really disruptive?

Here’s what might really upend the auto industry. In the fall of 2014 an investor contacted HBS professor Clayton Christensen with a friendly challenge. During its 10-year history Tesla has made just 59,500 cars, most of which cost upwards of $100,000. …

Is Elon Musk a disruptor?

The brash Tesla CEO, now the world’s wealthiest person following the electric automaker’s meteoric rise, was the quintessential Silicon Valley disruptor — except he no longer lives in California. Elon Musk raged against the restrictions for days, drawing support from Donald Trump.

Is Netflix a disruptive innovation?

Netflix is a classic example of disruptive innovation that used a new business model and technology to disrupt an existing market. It initially offered a DVD-by-mail rental service and later launched its online, subscription-based movie streaming service.

What’s the difference between low end and high end disruption?

The key insight to understanding high-end disruption is that innovation improves products either by increasing performance or by increasing affordability. While low-end disruption occurs through improvements in performance, high-end disruption occurs through improvements in affordability.

How is affordability related to high end disruption?

To understand high-end disruption, we must first take note of a stylized fact: Innovation improves a product by either improving performance or by improving affordability. There is, of course, a direct relationship between product performance and price, but innovation does not imply better performance, necessarily.

How does the high end disrupt the market?

Entering the market with an already high-performing product, high-end entrants move down the market by increasing affordability through sustaining innovations. As high-end entrants improve affordability, their product becomes cheap enough for more and more of the market, eventually over-taking the entire market.

What does Christensen mean by low-end disruption?

Christensen distinguishes between “low-end disruption”, which targets customers who do not need the full performance valued by customers at the high end of the market, and “new-market disruption”, which targets customers who have needs that were previously unserved by existing incumbents.