Disruptive Innovation Theory

Disruptive Innovation Theory, introduced by Clayton Christensen, describes how smaller companies with limited resources can successfully challenge established businesses. These newcomers typically start by providing simpler, cheaper products that appeal to overlooked customer segments. As they improve their offerings, they gradually attract more mainstream customers, ultimately displacing established companies. A common example is how budget smartphones gained market share against high-end brands. This theory highlights the importance of adaptability and innovation for all businesses, emphasizing that even dominant players can be vulnerable to emerging competitors.