Disruptive Innovation Analysis

Disruptive innovation analysis is a framework for classifying innovations and anticipating when a new entrant will overturn established market leaders. Clayton Christensen introduced the theory in his 1997 book The Innovator's Dilemma, which explained the paradox that well-managed incumbent firms can fail precisely because they listen to their best customers and invest in sustaining improvements, leaving them exposed to simpler, cheaper offerings that begin at the low end or in new markets and then improve until they capture the mainstream. The 2015 Harvard Business Review article by Christensen, Michael Raynor, and Rory McDonald clarified the concept after two decades of misuse, insisting that 'disruption' is a precise process - not a synonym for any breakthrough or any successful startup - in which an entrant gains a foothold in segments incumbents overlook and moves upmarket from there. The analysis compares performance trajectories against customer needs to tell sustaining from disruptive change.