This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.
Despite the widespread use of different meanings of innovations, there is still a rather unclear understanding of what constitute each of the type. However, the appropriate application and accurate interpretation of them is very important today because "different kinds of innovations have different competitive effects and produce different kinds of markets". (Markides, 2006)
According to PDMA Glossary (http://www.pdma.org/), discontinuous innovation is considered as "previously unknown products or untapped ideas that establish new consumption patterns and behavior changes". Such kind of innovations play a very essential role in building competitive advantage and, moreover, might contribute to the industry's or, particularly, to the firm's growth and profitability. (Veryzer, 1998) Meyers et al. (1989) incorporate discontinuous and radical innovations; however, it seems not to be absolutely correct. Discontinuous innovation is much more comprehensive idea of innovation, it includes as radically new as disruptive products. Nevertheless, the last notions demand more thorough explanation.
Radical innovations "create new-to-the world products". (Markides, 2006) More often they arise from a major technological breakthrough or application of new technologies. (Smith, 2010) However, what is more important, that they are rarely driven by customer's demand but by the supply-push of developing new technologies. (Markides, Geroski, 2005) In some ways, it might be deemed disruptive due to the fact that radically new products might "undermine the competences and complementary assets on which existing competitors built their success". (Markides, 2006) Erwin Danneels (2004) claimed that radical innovations are not only based on substantially new technologies but it should deliver more value to customers in comparison with existing products. The majority of researches has the common perception of this notion and defines it as a technology-based dimension of innovations, while disruptive innovations are considered as a market-based dimension. (Govindarajan, Kopalle, 2006) However, the concept of radical innovations is closely related to disruptive innovations. (Smith, 2010)
Aforesaid consideration is based on the main understanding of the world-famous Clayton Christensen's original theory which focuses on disruptive innovations and technologies which include tremendous changes in the markets and industries. (Smith, 2010) According to Markides (2006) who cites Christensen's concept, initially, the theory has compatible direction as radical innovations and focused on technological breakthroughs and how they might thrive in the market. Since that time, the definition of disruptive innovation has expanded its boundaries and has begun to involve innovative business models. Moreover, this idea is now supported by different well-known managers. For instance, Scott Anthony (2008), President of Innosight, mentioned that disruptive innovations arise from the major breakthroughs in the market, however, they do not often rely on them due to the fact that in the majority of cases the technologies are quite trivial as it is just the business model which is based on what company has to do to disrupt already existing companies. (www.youtube.com) The main difference from radical innovation is that business model is "much more than the discovery of a radical new strategy" or products. (Markides, 2006) Christensen (2000) noted several characteristics which are appropriate to disruptive innovations. They should be simpler, cheaper, more reliable, accessible, customizable, convenient and affordable than mature products are. Practically speaking, initially, disruptive innovations try to satisfy the requirements of small, specific and low-margin segments which value the features of new technologies or business model, while it is slighted by the incumbent firms which satisfy the mainstream and high end tier of consumer's hierarchy. Further, the mechanism of disruption starts up: new entrant improves its performance, changing the innovative game pro domo sua, and, consequently, attracts more customers from higher tiers. The aim of innovators who use such business model is to dominate and enlarge the market thanks to replacement of incumbents by entrants. (Daneels, 2004)
Incremental innovations are based on continuous improvements or "modest changes to existing products or services" on existing technologies and for established customers and markets. (Smith, 2010) In the case of comparison, it might be better to analyse the incremental and discontinuous innovations because the last one is a superconcept of disruptive and radical innovations. Incremental innovations arise from constant practices and consistent expertise. Susan E. Reid and Ulrike de Brentani (2004) cited the main distinction between these notions made by different scholars since 1961:
"â€¦while incremental innovation reinforces the capabilities of established organizations, discontinuous innovation forces firms to use new problem-solving approaches to develop new technical or commercial skills".
This concept is also supported by David Smith (2010) in his book Exploring Innovation. Incremental innovation is to support the sustaining growth in the core business. (Kaplan, 2009) This type of innovations is the most popular today due to the fact that the improvements are based on the customers' feedbacks, while discontinuous innovations are based on experimentation when the new product is introduced to the market as radically new technology or idea. That is why, disruptive innovation require a high potential of risk and great uncertainty. Sometimes such experimentations result in serious failures and managers do not often use or rely on them. However, it happens owing to the lack of knowledge about the target customers and their needs. (Govindarajan, Kopalle, 2006)
Concise brief overview of considered industries
Describing the further considered industries, the attention should be paid to the features of the industries' evolution which seem to be important to the understanding of the link with innovation concepts.
Traditional publishing industry
Nowadays, brick and mortar books are still very popular and they have a very long history. Over six thousand years after the first modern book was written, the significant changes occur in traditional publishing. (Mather, 2008) First of all, the delivery chain altered. Writers do not have to sell their books by themselves; today it is the duty of wholesaler, retailer or distributor. The second thing is the demand shift and technological breakthroughs which impact on the whole structure of the industry. It is very controversial question, how many people still prefer the printed-books to digital news in the Internet, E-books, PC books or even audio-books. However, all of these new types changed the type and violence of competition in the market. Some people predict the obsolescence of the bound book in fifty years; however, there are still a book-lovers and book-hunters who will never betray their beloved printed book format. At the same time, new readers demand more portable, cheap, colourful and interesting books. Nevertheless, money drives the business, and the costs of bound books became very high in comparison with costs for duplication of numerous copies for E-books. What is more interesting, the publishing houses' business is considered obsolete and it will be impossible to survive in this competition very soon. (Mather, 2008)
When E-books appeared (the first E-book, Rocket E-book and SoftBook, were invented in 1998), they were directed to small group of customers with specific areas of interest. (Sillito, 2000) Over 12 years, emerging E-book industry became thriving and rapid developing business. At present time, there is a wide range of E-books: Kindle 2/DX from Amazon, Nook from Barnes & Noble, Sony Reader, iPad from Apple and other. E-book reader is an electronic light-weight device with liquid-crystal touch screen, and the size of average book. It is easy to download texts and it has common standard for all brands of E-book. On average, it costs less than traditional printed-book. People have to buy books regularly; it means that the expenses are unpredictable and endless. However, purchasing E-book, people have to spend once for the device and then only for downloading or in some countries it might be free of charge where the rate of piracy is very high (e.g. Russia and China). These characteristics correspond to features of disruptive technologies (affordable, convenient, cheap, etc.).
The affect of innovations such as E-books on the traditional firm
Looking across different kind of impacts of E-book industry on the traditional firm, it should be highlighted that the main impact is possibility of disruption which might lead to loss of market share or to total failure. However, to understand the reasons of the disruption several advantages and disadvantages should be determined.
Broadly speaking, the idea of e-books has a huge number of advantages for stakeholders. First of all, writers might eliminate intermediaries between themselves and the readers. It means the independence of publishing houses, ability to self-publish for authors and increase of their profits. Bookish men do not have to wait for delivery or go to the bookshop now; they might purchase, download and then immediately start reading. Secondly, there is significant drop in book prices and opportunity of their copying, creating a great electronic library which contains thousand books. Moreover, the idea of e-book is attractive to publishers as the equipment, paper production and paint only rise in price today. Government threatens with penalties for deforestation and trade unions demand additional indemnifications for hazardous work conditions. Additionally, manufactures of E-books do not have to use paper or ink anymore. E-book industry relieve of these problems.
Besides, E-books are much more effective than paper analogues due to the fact that there is opportunity to use bookmarks and hyperlinks for simplification of navigation even in the simplest versions. In the modern E-books, there is the kind of simulation such as turning over the pages. What is more important for fastidious readers, there is enhances text readability owing to special lighting and such technology as E-ink.
Nevertheless, E-books are still far from being perfect. Some people consider E-books to be very expensive (approximately 350-400 dollars), plus it is still necessary to pay for electronic texts. (SonyStyle website, Wee, 2009) In comparison with traditional thin book or magazine, it is sometimes quite heavy and as it is a kind of computer device, it is very fragile so it should be exploited carefully.
Aforesaid proves that E-book definitely simplifies the process of reading and makes it much more affordable and accessible for all readers, writers and publishers. Nonetheless, it has several drawbacks to be perfect. Obviously, there are as positive as negative impacts upon traditional publishing industry which requires the proper respond to prevent total disruption.
Conclusions and recommendations
According to Trounson (2010), technology is not able to kill traditional book readers. Markides and Geroski (2005) claimed that traditional publishing firm should only concentrate on its competitive advantages to improve its performance. On the one hand, the publishing expert Mark Davis considers that E-books would complement rather replace hardback books in the nearest future owing to the "strong book buying habit". (cited by Trounson, 2010) Despite the fact that books are more popular among baby boomers and older generations, there are some reasonable ways to attract also younger generations as they prefer to dive into technology. (Burton, 2010) Children and youngsters like pictures while reading which illustrate the main idea and help the readers to understand the content of the book easily. Moreover, funny or bright pictures allow people's eyes to relax and to make their reading more interesting. That is why lavishly illustrates large-format books might attract all kind of readers. (Davis, 2010) Traditional publishing firm should use its opportunities to obtain more benefits. For those people who adore the ritual of reading, it is the vital part of their daily life, though sometimes books might be heavy than E-books. The next way to improve books performance is to alter hardback to softback, to reduce their weight. In this vein, books might be made of less quality and thinner paper and might be divided into chapters to let people read them on the way to their office or home (for example, in the metro or bus) and then throw it out or to give to the colleague. Moreover, it might reduce costs and price of the books.