Table 2. Disruptive innovation... | Emerald Publishing

Table 2.

Disruptive innovation characteristics extended by ecosystems

	Performance	Customers	Business model	Ecosystems
	Targeted performance of the product or service	Targeted customers or market application	Impact on the required business model	Supporting organism behind the innovation
Sustaining innovations	Performance improvement in attributes most valued by the industry’s most demanding customers. These improvements may be incremental or breakthrough in character	The most attractive (i.e. profitable) customers in the mainstream markets who are willing to pay for improved performance	Improves or maintains profit margins by exploiting the existing processes and cost structures and by making better use of current competitive advantages	The new technology’s ecosystem can be assimilated or the old technology’s ecosystem can be improved to stay competitive
Incumbents typically win
Low-end disruptions	Performance that is good enough along the traditional metrics of performance at the low-end of the main-stream market	Over-served customers in the low-end of the mainstream market	Uses a new operations or financial approach or both to earn attractive returns at the discount prices required to win business at the low-end of the market	Uses “plug-and-play” advancements within the new technology’s ecosystem to provide a more efficient or cost-effective solution at the low-end of the market
Entrants typically win
New-market disruptions	Lower performance in “traditional” attributes, but improved performance in new attributes – typically simplicity and convenience	Targets non-consumption: customers who historically lacked the money or skill to buy and use the product	Business model must make money at lower price per unit sold, and at unit production volumes that initially will be small. Gross margin dollars per unit sold will be significantly lower	Builds on a fundamentally different ecosystem involving often different participants and more complex networks than existing traditional ecosystems’ processes and structures
Entrants typically win

	Performance	Customers	Business model	Ecosystems
	Targeted performance of the product or service	Targeted customers or market application	Impact on the required business model	Supporting organism behind the innovation
Sustaining innovations	Performance improvement in attributes most valued by the industry’s most demanding customers. These improvements may be incremental or breakthrough in character	The most attractive (i.e. profitable) customers in the mainstream markets who are willing to pay for improved performance	Improves or maintains profit margins by exploiting the existing processes and cost structures and by making better use of current competitive advantages	The new technology’s ecosystem can be assimilated or the old technology’s ecosystem can be improved to stay competitive
Incumbents typically win
Low-end disruptions	Performance that is good enough along the traditional metrics of performance at the low-end of the main-stream market	Over-served customers in the low-end of the mainstream market	Uses a new operations or financial approach or both to earn attractive returns at the discount prices required to win business at the low-end of the market	Uses “plug-and-play” advancements within the new technology’s ecosystem to provide a more efficient or cost-effective solution at the low-end of the market
Entrants typically win
New-market disruptions	Lower performance in “traditional” attributes, but improved performance in new attributes – typically simplicity and convenience	Targets non-consumption: customers who historically lacked the money or skill to buy and use the product	Business model must make money at lower price per unit sold, and at unit production volumes that initially will be small. Gross margin dollars per unit sold will be significantly lower	Builds on a fundamentally different ecosystem involving often different participants and more complex networks than existing traditional ecosystems’ processes and structures
Entrants typically win