The term was coined by Clayton M. Christensen in his book “The Innovator’s Dilemma” in which he propounded two types of technology:
Disruptive technologies are more familiar than you think since you come across them every single day. Let’s view some examples in order to better understand what a disruptive technology is and what impact it has on our everyday lives:
There are so much more examples out there. Disruptive technologies have been a key part of our lives and without them we would not see the innovations and revolutions we see today. So the question whether disruptive technologies are shaping out future, the answer is yes. Traditional business models are being overturned, and new, revolutionary ways of doing business have entered the business landscape. Nowadays, companies are exploiting opportunities to deliver new or existing products or services in a very different and radical way from what the consumer is used to. Facebook, Amazon, Youtube, Google, Uber, Paypal and Netflix are only some examples.
The model is plotted along two dimensions; the product performance and time. It visualizes the product performance trajectories, which is how products improve over time, against the customer demand trajectories, which is the customer’s willingness to pay for that performance. Incumbent firms with high quality products aim to reach the high end of the market which carries a high profitability. Yet, while doing that they neglect to consider the low end of the market and the mainstream customers. As a result, new entrants can enter these uncrowded segments that have been overlooked by bigger companies. By doing this, new entrants enter the disruptive trajectory and start to move up higher along time to meet and challenge the incumbents firms.
(Christensen, Raynor and McDonald, 2015)