Disruptive Innovation
Definition
Disruptive innovation refers to a process by which a smaller entity, with fewer resources, challenges established market leaders.
This occurs when a new product or service, often initially simpler and less expensive, begins to gain traction in a market segment overlooked by incumbents. Over time, the innovation improves its performance and features, eventually displacing established offerings, technologies, or even entire industries.
For example, the introduction of streaming services fundamentally altered the video rental market.
The term is frequently encountered in discussions about business strategy, technology, and market dynamics.