DISRUPTIVE

INNNOVATIONS
A Way for Winning Opportunities in Disruptive Era

By
Yusril Miftah Rizki
What is Disruptive
Innovations?
N owadays we live in disruptive era. But
what the disruptive era really is? Dis-
ruptive era is an era where disruption hap-
pens. Disruption describes a process where-
by a smaller company with fewer resources
is able to successfully challenge established
incumbent business. Smaller company is
able to disrupt established incumbent busi-
ness because of disruptive innovation.
Disruptive innovation is an innovation
that creates a new market and value network
and eventually disrupts an existing market
and value network displacing established
market-leading firms, products, and alliances
(Christensen, 2003). Disruptive innovation
happens as entrants or small businesses tar-
geting low-end market and obtaining foot-
hold by providing more suitable functionality
products and services at lower price when in-
cumbents focus on improving their products
and services for their most demanding (and
usually most profitable) customers rather
than fulfilling the needs of low-end market.
Making Disruptive most profitable and demanding custom-
ers with high quality products and services
Innovation (mostly come with high price), they pay less
attention to less-demanding customers or
U nless you don’t know the basic con-
cept of disruptive innovation, mak-
ing disruptive innovation is not difficult as
low-end market because in their view they
have maximized profit if they focus to their
most profitable and most demanding. The
you think. Understanding the basic concept less-demanding customers became over-
of disruptive innovation based on Chris- looked. This phenomenon opens the oppor-
tensen’s theory will help you to make small tunity for disrupter to provide “good enough”
business that can compete the incumbents. products and services at low price. At this
There are basic concepts of disruptive in- condition, less-demanding customers buy
novation that need to be consider such as: products and pay services to the disrupt-
er and low-end market foothold emerged.
Disruptive innovations originate in
low-end market foothold
Disruptive innovations catch
Disruptive innovations can emerge high-end market by improving
footholds in low-end market. It all start quality of their products and services
when incumbents focus to provide their
Initially, disruptive innova-
tions emerged in low-end market
and considered inferior by most
of an incumbent’s customers (see
Fig. 1). Particularly the customers
will not merely change to choose
disrupter’s product because it is
less expensive. Instead, incum-
bent’s customers wait until dis-
rupter’s products catch the incum-
bent’s customers standard quality
so they can buy products as good
as incumbents provide but with
lower price. This disruption can
make prices down in the market.
Fig. 1 Disruptive Innovations Trajectory
(Source: hbr.org)
Disruptive innovations use fewer resources
Comparing to the incumbents, disrupters tend to use fewer resources. It means
less people and less equipment or facilities making the operation less cost. Uber, for ex-
ample, they do not have vehicle to run their business, Instead, they rely on their drivers
who have own their vehicle to deliver passenger. And Netflix which does not have phys-
ical store like Blockbuster, video rental company, only depends on the internet net-
work to provide streaming. Thus making the disrupters run their business at lower cost.
 Opportunities in the users to borrowing high quality books
(mostly imported books) which are expen-
Disruptive Era sive for some people. Bookabuku enables
low-end market to access imported books.

T here are so many opportunities in dis-
ruptive era that we can take utilized by
creating disruptive innovations. As long we
can see the opportunity by viewing a prob-
lem in the low-end market and then provide
the solution for less-demanding custom-
ers, we can create a disruptive innovation.
Take example of Bookabuku, a lend-
ing-borrowing book platform from Indo-
nesia, Bookabuku provide platform for
Second example is online shop such as Bu-
kalapak. Bukalapak creates online market
that provide access to small and medium
businesses to sell their products and help
marketing the businesses so they successful-
ly competing against large retail companies.
Fig. 2 Bookabuku and Bukalapak Logo
(Source: google.com)

IMPLEMENTING DISRUPTIVE INNOVATIONS IN BUSINESS

MODEL
Because there are so
many opportunities,
we should enthusi-
ast to disruptive era
because we also can
win the competition
as long we can see the
problem of low-end
market and provide
simple yet effective
solution to them.
Another important
thing is to bring the
disruptive innova-
tions in our existing
business models.

Fig. 3 Elements in Business Model

(Source: mitsmr.com)
In the business model, disruptive innovations are included in the value proposition
that can help business run more effectively, conveniently, and affordably for low-end market.
(see Fig. 3)
 REFERENCES
Christensen, C.M., Horn, M.B., Caldera, L. and Soares, L., 2011. Disrupting College:
How Disruptive Innovation Can Deliver Quality and Affordability to Postsecondary
Education. Innosight Institute.
Christensen, C.M., Raynor, M.E. and McDonald, R., 2015. What is disruptive innovation.
Harvard Business Review, 93(12), pp.44-53.
King, A.A. and Baatartogtokh, B., 2015. How useful is the theory of disruptive innovation?.
MIT Sloan Management Review, 57(1), p.77.