WEBVTT

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How does a small, young company
beat an industry giant

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on its own turf?

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Through what Harvard Business
School professor, Clayton

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Christensen, calls "disruptive
innovation." It works like

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this: Big players focus on
sustaining innovation,

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upgrading existing products
and services to attract

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higher- paying customers.

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But soon, they start to ignore
all the regular customers who

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just want simple, low-cost
alternatives.

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That's where the entrepreneurial
company jumps

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in--with that basic offering.

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The big guys stay focused on
more- profitable customers and

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begin to over-serve, adding
bells and whistles no one

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wants to pay for.

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Meanwhile, the disruptor
improves its product to appeal

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to more people.

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By the time the incumbent
notices, the disruptor has

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already started to take
over the market.

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The classic example is the steel
mini- mills, which first

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produced low-quality rebar,
then moved to sheet steel,

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stealing business from
the large mills

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that had been dominant.

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More recent disruptors include
carmakers like Toyota and

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Hyundai, which launched with
economy models then added

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luxury features and brands.

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The only way for industry giants
to fight back is by

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launching their own disruptive
innovations.

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To succeed, they must treat the
project as a separate unit

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with a different business model
and growth expectations,

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ask, "What job do customers need
to get done?", segment

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customers by job--not by
product, market size, or

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demographics--and develop basic,
low-cost ways to get

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the job done.

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That's how Procter & Gamble
came up with Crest White

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Strips, a cheap, do-it-yourself
alternative to

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an expensive dental service.

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Disruptive innovation creates
new markets and reshapes

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existing ones.

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To achieve growth in a
fast-changing world, you want

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to be a disruptor.

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Don't be disrupted.

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