Supply Chain

J PROD INNOV MANAG 2006;23:19–25 r 2006 Product Development & Management Association

Disruptive Innovation: In Need of Better TheoryÃ

Constantinos Markides

C

hristensen’s (1997) original theory focused on disruptive technologies. Over time, the same theory has been used to explain all kinds of disruptive innovations. This is a mistake. Different kinds of innovations have different competitive effects and produce different kinds of markets. They should be treated as distinct phenomena. This article summarizes what the academic literature has to say about two specific types of disruptive innovations—namely, business-model innovations and radical (new-to-theworld) product innovations. It argues that even though they share many similarities to what Christensen calls disruptive innovations, they are still different phenomena: they create different kinds of markets, pose radically different challenges for established firms, and have radically different implications for managers. It is only when the topic of disruptive innovation is broken down into these finer categories that progress can be made. In a recent survey of the literature, Danneels (2004) examined the theory behind disruptive technological innovation and identified a number of issues that require further and deeper exploration. One of these issues is the actual definition of disruptive innovation. It appears that despite the widespread use of the term by both managers and academics, there is still a rather unclear understanding of what constitutes disruptive innovation. In its original formulation, Christensen (1997) focused primarily on technological innovation and explored how new technologies came to surpass seemingly superior technologies in a market. Over

time, Christensen widened the application of the term to include not only technologies but also products and business models. For example, Christensen and Raynor (2003) list as disruptive innovations such disparate things as discount...