Disruptive innovation is an innovation theory that is based on a simple approach to introduce a product or service in a particular set of market (Christensen & Raynor, 2003). In disruptive technology, simple and cheaper products are developed to replace the expensive products. Main focus of disruptive innovation is on low income groups. Trend of disruptive technology has becomes a base for the organizations to develop competitive advantage. Firms like Wal-Mart, Dell, Kodak, Southwest Airlines etc have leveraged disruptive innovation approach tremendously (Cravens, 2006). Retail industry is well known for the disruptive innovation approaches. I have selected P&G that is a fortune 500 organization to discuss disruptive innovation (Disruptive Innovation Primer, 2005). There will be a discussion of leadership role in implementation of strategy, business challenges at local and global marketplace, opportunities, components, implications of strategies, strategies to collect ideas and strategic expansion.
Role of leader
Leaders play a vital role directing the overall path of disruptive innovation. Innovation is managed by the leaders through their leadership styles and tactics. P&G has implemented disruptive technology in the form of crestwhitestrpis product. The company has played a vital role in developing and implementing its disruptive innovation approach for the lower end customers (Disruptive Innovation Primer, 2005). It has developed a new market through the disruptive technology. The company has targeted a new market of those consumers that were not able to avail the expensive services of dentists for whitening their teeth.
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The company management has played a vital role in the development of the product for the non-consumers. After identifying and analyzing market opportunities, the company has executed its disruptive technology to generate new sources of revenues. The company has developed new product with a simple and affordable approach that created a booming market for P&G. It has increased extent of profitability through the help of crest (Disruptive Innovation Primer, 2005).
Disruptive innovation has two sides that are positive as well as negative aspects. There are opportunities and challenges of pursuing disruptive technology at local and global marketplace. These are as follow:
Local marketplace: Local marketplace poses an array of business challenges that can affect the strategic goals of the company. These are as follow:
Collaboration: Collaboration among the employees is a business challenges are faced by the company in the development of disruptive technology (Cravens, 2006).
Customer relationship management: Customer relationship management is another challenge before the company that restrict it leverage of benefits of disruptive technology.
Global marketplace: At global marketplace, the company is also experiencing challenges. These are as follow:
Value chain activities: Marketing forces also influencing the value chain activities of the company. By attaining coordination among the producers, suppliers, customers and market intermediaries, company can leverage the benefits of global marketplace.
Cross functional challenges: Cross functional issues like team building, conflict resolution, communication and relationship management also influence the company goals to implement disruptive technology (Cravens, 2006). So, by addressing these issues, it is possible for P&G to execute disruptive technology at global level successfully.
Diversity: Diversity is another business challenge before P&G, so it is also acting as major issue in the path of disruptive technology. By addressing, diversity it is possible for the company to take benefits from growing economic environment.
There are various opportunities for disruptive technologies that can be used by the company to generate new options for revenues. These are as follow:
Outsourcing: The Company can outsource new technology and resources for developing disruptive innovation. With the help of this opportunity, the company can enhance its profitability and income (Tavidze 2008).
Cheaper technology: Cheaper technology investment is another scope for the company that it can adopt to serve a group of new customers (Assink, 2006).
There are some key components that the company should consider in order to strengthen its disruptive technology base to replace the existing players. These are as follow:
Internal and external data: Organization should consider its internal culture, technology base, market trends and indicators in order to leverage the benefits of market opportunities.
Human capital: Competency, skills, knowledge, capabilities and knowledge of human resources should be also considered by the company to develop a new profitable market for its business (Christensen & Raynor, 2003).
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Organizational processes: Organizational processes like supply chain, value chain, marketing, sales and R&D should be also considered by the company (Sandberg & Hansen, 2004).
Regulatory requirements: Regulatory requirements also play a vital role in the success or failure of disruptive innovation. So, it is essential for the company to consider the rules, regulations and legal requirements in to widen base for disruptive technology (Koontz & Weihrich, 2006).
Implications of strategies
Execution of disruptive technology has implications on the partnership and stakeholders. These are as follow:
Enhanced collaboration: Implementation of the disruptive technology enhances collaboration with the partners, suppliers, producers, market intermediary (Evans, 2003).
Profitability: Investment into simple and cheaper technology enhances profits and income for the company that is beneficial for the employees, shareholders and partners.
Business growth: Strategic use of disruptive technology is also favorable fort the company growth (Christensen & Raynor, 2003). Business growth has positive implications for the partners, suppliers, customers and employees.
New Markets: Disruptive technology is attractive enough to identify new markets. New markets are profitable for the suppliers, partners, shareholders, employees and customers.
Company is successfully taking the advantage of disruptive innovation, but there is a broader scope for the company to articulate this theory into practice (Ryall & Craig, 2003). There are some strategies that company should adopt to strengthen its ongoing strategic innovation. These are as follow:
Emergent strategies: Company should go for an emergent strategy in order to develop a new market. With the help of this strategy, it is possible for P&G to maintain its flexibility and identify market trends. It will help the company to obtain market feedback on what is working and what is not working. Through emergent strategy, company can collect information regarding market uncertainty. This strategy will also assist the company management to address key business challenges (Disruptive Innovation Primer, 2005).
Deliberate strategy: Company can also adopt deliberate strategy to collect idea for strategic innovation. As a part of this, company should develop a set of objectives, determine steps and act according to the selected steps. It will help P&G to invest new technology in profitable areas that are generally ignored by other market players.
To develop strong strategic organizational decisions for disruptive technology based innovation, P&G should consider some key elements. These are as follow:
Ethics: Ethics play a vital role in developing sustainability of a disruptive innovation strategy. So, to ensure sustainability, ethical code of conduct and standards will be followed by the company (Koontz & Weihrich, 2006).
Leadership: Appropriate leadership style and approaches should be used to develop organizational strategic decisions for ensuring sustainability.
Economic elements: Economic elements like growth rate, price indicators and market trends should be also considered in the development of strategy for disruptive innovation (Ryall & Craig, 2003).
Social elements: Social elements like social norms, trends, assumptions and outlook should be also considered by the company to sustain a socially responsible behavior (Maignan, Ferrel & Ferrel, 2005).
On the basis of above discussion on disruptive innovation implemented by P&G, it can be inferred that it is a source of taking advantage of new markets through simple technology. There are both challenges and opportunities of pursuing for disruptive innovation, so this aspect should be considered by the company. It is essential to explore a profitable set of opportunities. Apart from this, company should consider social, legal, ethical and economical aspects to implement disruptive technology at global level.