The Innovator's Solution: Creating and Sustaining Successful GrowthThe Innovator's Solution: Creating and Sustaining Successful Growth By ChristensenClayton M. and RaynorMichael E.. Boston, MA: Harvard Business School Press, 2003. 304 pages, hard cover, $29.95.

A framework for disruptive innovation

“…The author argued that firms traditionally focus on serving the demands of high- and very high-demand customers. As a result, the product improves beyond the needs of low-demand customers, and they are forced to pay higher prices for product features they do not require (Christensen, 1997; Christensen and Raynor, 2003; Assink, 2006; Govindarajan and Kopalle, 2006b; Yu and Hang, 2010; Kohlbacher and Hang, 2011). These unhappy customers are generally the first to adopt disruptive products, as such products tend to be simpler, cheaper and sufficient to fulfill their needs (Markides, 2006a; Hang et al , 2011; Kohlbacher and Hang, 2011).…”

“…Recent studies have argued that disruptive innovations do not always start in the low-end market; they can also start market penetration by offering high-quality products ( high-end disruption) with different features and functionalities (Utterback and Acee, 2003, 2005; Hang et al , 2011; Kohlbacher and Hang, 2011; Sandström, 2011; Christensen et al , 2015). Christensen and Raynor (2003) argued that the segmentation of these customers to fulfill their needs should be performed according to the end they are trying to achieve with the product, not by age, gender or location. But it is critical to understand that a large percentage of the customers are outside the continuum of the existing customer base.…”

“…He argued that innovations that only have impact on products are sustaining innovations, as they improve the performance of existing products and help firms to sustain existing customers, whereas disruptive innovations have an impact on market, by changing its dynamics and expanding market boundaries (by creating new customers). In other words, sustaining innovations are those that are built upon existing products/services to serve existing customers (Christensen, 1997; Christensen and Raynor, 2003). Disruptive innovations target new customers by offering different performance metrics in comparison to one on which firms compete (Danneels, 2004; Sun et al , 2008).…”

“…The steady and continuous improvement of new features introduced by disruptive innovations eventually makes these products attractive to mainstream customers (Figure 2). The result of this new performance trajectory is higher profit margins in the long run (Kim and Mauborgne, 2005; Govindarajan and Kopalle, 2006b) with lower competition at the introduction phase (Heiskanen et al , 2007), as incumbents tend to initially ignore the disruptive innovations, considering them to be of low quality or unrelated to their industry (Christensen and Raynor, 2003; Hang et al , 2011; Denning, 2016).…”

“…Many have argued that incumbent firms cannot develop disruptive solutions in their existing settings (Assink, 2006; Yu and Hang, 2010), and have emphasized the need to set up separate units (Christensen, 1997; Kenagy and Christensen, 2002; Kim and Mauborgne, 2005; Assink, 2006; Lettice and Thomond, 2008) that will compete with firm’s existing units directly, challenging its long-standing market vision and beliefs. Others have proposed to wait, and watch the market closely, and using available resources to buy new entrants with disruptive potential (Christensen and Overdorf, 2000; Christensen et al , 2002; Christensen and Raynor, 2003; Sandström et al , 2009; Christensen et al , 2011).…”