Disruptive Product Strategy for Industry First Mover: A Bottom-Up, Low-Cost Innovation Model

Disruptive Product Strategy for Industry First Mover: A Bottom-Up, Low-Cost Innovation Model

Iuan-Yuan Lu (National Sun Yat-Sen University, Taiwan) and Chao-Ching Wei (National Sun Yat-Sen University, Taiwan)
DOI: 10.4018/978-1-4666-0134-5.ch005

Abstract

This chapter combines disruptive innovation with industry evolution theory to construct an innovation planning phase, including exploration, assessment, strategy formation, and activity planning, and further verified it using qualitative interviews and quantitative analysis of a successful disruptive innovation case in the IT industry. The research constructs an industry evolution model of disruptive innovation and first mover’s strategic direction. When an enterprise is positioned in the market with a disruptive innovation, it is expected to gain a large market and give customers enough reasons to make a purchase. During the course of the planning phase, a firm should use different strategic approaches, such as innovative differentiation, leading product, low price expansion, and diversification of the product line, in order to create a significant strategic synergy which will help to speed the time to market and obtain the advantage of low cost, thus producing a “single innovation concept with diversified value contribution” to help restructure the entire market.
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Research Background And Introduction

In the 21st century, the most popular research topics are how enterprises can possess a leading edge in such a fiercely competitive global industrial and marketing context, and how to introduce innovative products as well as manufacturing techniques in order to transform themselves into distinctive and successful companies. There are two main benefits which innovation can induce, namely, improved opportunity for survival and higher profit margins. It is thus important for managers to learn how to manage the innovation process and help their firms to go beyond past experience and knowledge to develop a forward-looking innovative technologies or products. This chapter will attempt to explore the course of disruptive innovation, including its related evolutionary processes, and thus construct an industry evolution model of disruptive innovation, which will combine disruptive innovation with industry evolution theory, and also examine a successful disruptive innovation case in the IT industry.

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