Innovation is a buzzword frequently used in business, technology, and other fields. Companies that innovate can gain a competitive advantage and increase their market share. However, not all innovation is created equal. This article will explore the differences between sustaining innovation and disruptive innovation and discuss which is better for businesses.
Innovation is creating new or improved products, processes, or ideas. It can be categorized into two main types: incremental and radical. Incremental innovation involves small improvements to existing products, processes, or ideas, whereas radical innovation involves creating something new.
Innovation can also be categorized based on sources, such as internal innovation, which comes from within a company, or external innovation, which comes from outside the company through partnerships, collaborations, or acquisitions. Additionally, innovation can be categorized based on its stages in the product life cycle, such as early-stage innovation, which focuses on research and development, or late-stage innovation, which focuses on commercialization and scaling.
What is Sustaining Innovation
Sustaining Innovation refers to introducing new or improved products, processes, or ideas that maintain the current performance level of an industry or company. It's an incremental innovation that aims to improve existing products, processes, or ideas and keep the company competitive. It does not disrupt the existing market, but it improves it.
Characteristics of Sustaining Innovation
- Incremental improvements to existing products or services
- Focus on optimizing processes, improving features, or reducing costs
- Driven by customer feedback and market demand
- Generally lower risk than disruptive innovation
Examples of Sustaining Innovation
- Apple releasing a new iPhone model with updated features
- Coca-Cola introducing new flavors or packaging designs
- Toyota improving fuel efficiency in its vehicles
Sustaining products have the following qualities:
- They improve the performance of existing products or services
- They target existing customers and markets
- They are developed and marketed by established companies
- They are incremental in nature, meaning that they do not fundamentally change the market or create new markets
- They are often protected by patents or other forms of intellectual property.
What is Disruptive Innovation
Disruptive Innovation refers to introducing new or improved products, processes, or ideas that fundamentally change the market. It creates new markets and value networks and disrupts existing ones. It often starts by appealing to a small, niche market before gradually moving upmarket, eventually disrupting the whole market. This radical innovation usually comes from new entrants or small companies challenging established players.
Characteristics of Disruptive Innovation
- A radical departure from existing products or services
- Creates new markets or disrupts existing ones
- Driven by new technologies or business models
- Generally higher risk than sustaining innovation
Examples of Disruptive Innovation
- Uber disrupting the taxi industry with its ride-hailing service
- Netflix disrupting the home entertainment industry with its streaming service
- Airbnb disrupting the hospitality industry with its home-sharing platform
Disruptive products have the following qualities:
- They create new markets or value networks
- They target non-consumers or new customers
- They are often developed and marketed by new entrants or small companies
- They are often simpler, cheaper, and less feature-rich than existing products but still meet the needs of their target customers.
- They initially have lower performance than existing products, but they improve and disrupt the market over time.
- They often challenge existing industry standards and business models.
- They can be protected by patents or other forms of intellectual property, but it's not always the case.
What Is the Difference Between Disruptive and Sustaining Innovation?
The main difference between disruptive and sustaining innovation is how they change the market. Sustaining innovation improves existing products or services, while disruptive innovation creates new markets and disrupts existing ones.
Sustaining technology refers to advancements or improvements that enhance the performance of existing products or services. And are typically adopted by the existing customers of the industry. They are incremental and mainly focus on improving existing products, processes, or ideas. Sustaining technology keeps the company competitive in the market. Sustaining technology is often developed by established companies and protected by patents or other forms of intellectual property.
On the other hand, Disruptive technology refers to advancements or innovations that fundamentally change the market, creating new markets and value networks while disrupting existing ones. They often perform less than existing products, but they improve and disrupt the market over time. Disruptive technology is often developed by new entrants or small companies and can challenge existing industry standards and business models. They can be protected by patents or other forms of intellectual property, but it's not always the case.
Sustaining or Disruptive Innovation Which One is Better?
Both sustaining and disruptive innovation have their advantages and disadvantages. Sustaining innovation is less risky and more predictable, making it a good choice for established companies that want to maintain their market position. Disruptive innovation, on the other hand, has the potential to create new markets and transform entire industries. However, it is also riskier and requires significant investment.
Ultimately, the choice between sustaining and disruptive innovation depends on a company's goals, resources, and risk tolerance. A company that wants to maintain its market position and customer base may focus on sustaining innovation. A startup or new market entrant may focus on disruptive innovation to create a new market or gain a competitive advantage.
Conclusion
Sustaining and disruptive innovation are different types that change the market differently. Sustaining innovation refers to introducing new or improved products, processes, or ideas that maintain the current performance level of an industry or company.
It's an incremental innovation aiming to improve existing products, processes, or ideas and keep the company competitive. Disruptive innovation, on the other hand, refers to introducing new or improved products, processes, or ideas that fundamentally change the market, creating new markets and value networks and disrupting existing ones.
It often
starts by appealing to a small, niche market before gradually moving upmarket,
eventually disrupting the whole market. Both innovation types have advantages and disadvantages; their choice depends on a company's goals and resources. Companies can make informed decisions about their innovation strategies by understanding the differences between sustaining and disruptive innovation.
Written by: Aykut Alan
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