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ACCA Strategic Professional · Strategic Business Leader · Enabling success: disruptive technologies

Zenara Printing, a long-established firm, sells high-margin professional printers to large corporates. A start-up launches cheap, simple desktop printers that initially appeal only to small home offices and are of lower quality. Over several years the quality improves and the start-up starts winning mainstream customers. Which concept does this pattern best illustrate?

The pattern is low-end disruptive innovation. The entrant starts with a cheaper, simpler product for overlooked small customers, improves quality over time, and then moves upmarket to win the incumbent's mainstream customers. Sustaining innovation instead refines products for existing demanding customers.

  1. ALow-end disruptive innovation, entering at the bottom of the market and moving upmarketCorrect
  2. BSustaining innovation, improving existing products for the most demanding customers
  3. CBlue ocean strategy, creating an entirely uncontested market through value innovation
  4. DPorter's threat of substitutes arising only from a different industry

Explanation

Christensen's disruptive innovation describes entrants who begin with simpler, cheaper offerings aimed at overlooked or low-end segments, then improve and move upmarket. Sustaining innovation is wrong because it improves products for existing high-end customers, which is what the incumbent does, not the entrant.

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