Disruptive Innovation - The only way for companies to survive

We are experiencing the era of greater technological transformation. One of the people responsible for such transformation is the internet, which has several opportunities, especially in the business area.

The companies that tend to survive in the current market are those that can adapt to these technologies, but innovate by virtue of improving the quality of their products and services, bringing more satisfaction to their customers.

The key concept so that the companies can continue with their progress is the innovation, therefore, there is a need to know the type of innovations that can be adapted to each situation of the company. We can classify as:

Sustained innovation

The great characteristic of this type of innovation is that it consists of a product or service that already exists in the market, in which the company seeks to create improvements in order to sustain its existence. One of the examples might be adding new functionality or features to a product or improvements in services. The negative aspect of this type of innovation is that it does not satisfy all customers, since there are more demanding customers who may require more personalized products or services, compared to the standard offered by the company. Hence comes disruptive innovation.

Disruptive Innovation

Disruptive innovation consists of small companies that can satisfy some requirements of some customers that are not satisfied by the products and services offered by the current companies. One of the features is a low price or the creation of a more user-friendly product. According to author Clayton Christensen, author of "The Innovation Dilemma," where he popularizes the concept of disruptive innovation, he adds that companies that apply disruptive innovations in the first stage are not appreciated by the majority because they can sometimes present poor quality compared to large companies, but it can satisfy the need of some customers. As time goes by, it will improve your product or service, as feedback from your first customers. And it's getting more customers until it reaches a level that surpasses the big companies. At that point, other companies realize the existence of a new market, and most of the time it may be too late for them to do something about it.

A typical example is the case of M-Pesa, a service that enabled the use of money in a mobile account. It is possible to make deposits, purchases, and shipments of money, and some of these services are offered by banks. In the beginning, it was used by some of the customers and had some flaws in the system. But over time, technology has been improving until it reaches a level of satisfaction winning over most of the customers. Unlike a bank, the M-Peso system allows customers to deposit money at any time and anywhere just by going to an authorized agent.

One of the current examples is the case of 3D printing. At an early stage, they have little reliability in the printouts but have improved over time. There will be times that can reach a high level of satisfaction, and we will probably be able to print many products without having to leave the house, be it a pair of shoes or another object. From there, some companies may even go bankrupt if they have not taken some steps.

However, as the rapid advancement of technologies, it is necessary that several companies seek to innovate before someone does in their place, and it may be late to take action. They should also be aware of new technologies that tend to gain space, such as the example of Artificial Intelligence, Internet of Things, virtual and Augmented Reality, cloud computing, robotics, among others, where the greatest opportunities for innovation are found.