Question 2: According to Christensen there are two main types of disruptive innovation. Discuss the two main forms of disruptive innovation and then discuss how those two main types of disruptive innovation can be applied to the 'three horizons' model.
Low-end Disruptive Innovation: This type of innovation targets customers who are not satisfied with the existing products and in place offers them a simpler, convenient, and inexpensive alternative. This type of innovation initiates from the market’s bottom and works its way up, disrupting established players and capturing market share.
New-market Disruptive Innovation: This type of innovation creates a new market by introducing products or services that are not offered in the market currently. This type of innovation is often more difficult to bring to the market as it requires significant investments in R&D, marketing, and customer education.
The 'three horizons' model is a framework used to manage and prioritize innovation within an organization. The three horizons are:
Horizon 1: The present and near-term, characterized by incremental innovations that improve existing products and services.
Horizon 2: The mid-term, characterized by new products and services that address emerging or latent customer needs.
Horizon 3: The long-term, characterized by disruptive innovations that create new markets and transform existing industries.
Low-end disruptive innovations can be applied to the 'three horizons' model by considering them as part of Horizon 3. These innovations can create new markets by introducing simpler, more convenient, and lower-cost alternatives to existing products and services.
New-market disruptive innovations can also be applied to the 'three horizons' model by considering them as part of Horizon 3. These innovations can create entirely new markets by introducing products and services that are not currently offered and as stated earlier these would require significant investments in R&D, marketing, and customer education.
In conclusion, both innovation types can be applied to the 'three horizons' model by considering them as part of Horizon 3 and investing in them accordingly. This allows organizations to manage their innovation pipeline and prioritize investment in disruptive innovations that have the potential to transform their industries and create new markets.