Disruptive technology / disruptive innovation (Textbook, Ch. 4): A technology that starts simple or low‑quality but eventually replaces established products or firms. Example: Netflix streaming disrupting DVD rentals like Blockbuster.
Sustaining innovation (Textbook, Ch. 4): Incremental improvements to existing products driven by current customers’ needs. Example: Annual upgrades to smartphone cameras.
Enabling technology (Textbook, Ch. 4): A technology that lowers cost or complexity, making products accessible to more people. Example: Cloud computing enabling streaming services.
Technology price elasticity (Textbook, Ch. 4): Demand increases sharply as the price of a technology falls. Example: Smartphones becoming widespread as prices dropped.
Value network (Textbook, Ch. 4): The system of partners, suppliers, and customers that must benefit for a technology to succeed. Example: App developers and users supporting mobile platforms.
Disruptive vs. sustaining innovation (Textbook, Ch. 4): Disruptive innovation targets new or low‑end markets, while sustaining innovation improves existing products. Example: Streaming services vs. DVD quality improvements.
Envelopment (Textbook, Ch. 4): When a dominant firm absorbs another product by bundling its features into an existing platform. Example: Microsoft bundling Internet Explorer with Windows.
Cannibalism (business) (Textbook, Ch. 4): When a new product reduces sales of a company’s existing product. Example: New iPhones reducing sales of older models.
Cash cow (Textbook, Ch. 4): A product that generates steady profits with little investment. Example: Microsoft Windows.
Creosote bush (Textbook, Ch. 4): A metaphor describing how dominant firms crowd out smaller competitors. Example: Large tech platforms limiting startup growth.
Fixed costs (Textbook, Ch. 4): Costs that remain constant regardless of production level. Example: Factory rent.
Key performance indicators (KPIs) (Textbook, Ch. 4): Metrics used to evaluate how well a company achieves its goals. Example: Customer retention rate.
Long tail (Textbook, Ch. 4): A strategy focused on selling many niche products rather than a few hits. Example: Netflix’s large catalog of lesser‑known films.
Marginal costs (Textbook, Ch. 4): The cost of producing one additional unit. Example: The near‑zero cost of streaming to one more user.
Early digital cameras entered the market with poor image quality but later replaced film cameras. Which characteristic of disruptive technology does this illustrate?
Why did Blockbuster struggle to respond to Netflix?
What helped ride‑sharing services disrupt the taxi industry?
Why might incumbents ignore early disruptive innovations?
What problem do incumbents face when disruptive technology becomes “good enough”?