Beware of “top down” disruptive innovations
Nicolas Carr over at Strategy and Business (here - free, requires registration - via Ideaflow) argues that companies should not just be paranoid about bottoms-up disruptive innovations as those described by Harvard Prof. Clay Christensen in his innovator’s dilemma set of books, but that they should also be on the lookout for top-down disruptive innovations.
Unlike bottoms-up disruptive innovations, which requires an incumbent player to give up their high-margin products and markets in order to capitalize on them (an unlikely event according to Christensen) - top-down disruptive innovations are higher end than what is currently in the market and therefore come with higher margins.
Examples listed in the article as top-down disruptive innovations include Fed-Ex, Wang, iPod, and satellite-radio.
While I buy the Fed_ex story and perhaps also the Wang story, I am not sure that the iPod is a top-down disruptive innovation. Isn’t it the logical outcome of the bottoms-up disruptive innovation that MP3 players have been going through in the last decade? Doesn’t it follow a classic innovator’s dilemma curve? I think so…
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