Exponential Growth in Product Performance and its Implications for Disruptive Innovation Theory

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Juan Sebastian Montoya Toshiro Kita, Professor

Abstract

This research studies the theory of disruptive innovation. It identifies the strengths and weakness of the theory, and focuses on the concept of product performance as an incomplete notion that needs further study. By using quantitative and qualitative evidence from the disk drive industry, the semiconductor industry, and the personal and mobile computing industries, this research tests Clayton Christensen’s disruption theory, the main theory proposed today as an explanation of disruption. In order to understand the phenomenon of over-serving customer needs this research analyzed the curves of performance improvement in disk drives, semiconductors, and personal and mobile computing devices from 1974 to 2015. Further historical analysis was used to contextualize this data and explain the implications that performance improvements had on usage and customer value. The main finding of this research was identifying that the rate of improvement of a technology’s performance is not often faster than the rate at which customer needs increase over time, instead both curves adapt to each other as companies adjust their offer and innovations transform performance gains into customer value. This contradicts a key hypothesis of disruption theory. Finally, in order to account for these results this research used the notion of elasticity and coined a new concept: ‘elasticity of customer needs’, which describes the responsiveness of the performance demanded by customers to a change in the performance offered by companies, especially when new value is created. This concept furthers the understanding of performance and complements the theory of disruptive innovation.

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How to Cite
MONTOYA, Juan Sebastian; KITA, Toshiro. Exponential Growth in Product Performance and its Implications for Disruptive Innovation Theory. International Journal of Business and Information, [S.l.], v. 13, n. 1, may 2018. ISSN 2520-0151. Available at: <http://ijbi.org/ijbi/article/view/235>. Date accessed: 24 may 2018.
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