on its own turf?

Through what Harvard Business School professor Clayton

Christensen calls disruptive innovation.

It works like this.

Big players focus on sustaining innovation, upgrading

existing products and services to attract

higher-paying customers.

But soon they start to ignore all the regular customers who

just want simple, low-cost alternatives.

That's where the entrepreneurial company jumps in

with that basic offering.

The big guys stay focused on more profitable customers

and begin to overserve, adding bells and whistles no one

wants to pay for.

Meanwhile, the disruptor improves its product

to appeal to more people.

By the time the incumbent notices,

the disruptor has already started

to take over the market.

The classic example is the steel mini mills

which first produced low-quality rebar, then moved

to sheet steel, stealing business

from the large mills that had been dominant.

More recent disruptors include makers like Toyota and Hyundai,

which launched with economy models then added

luxury features and brands.

The only way for industry giants to fight back

is by launching their own disruptive innovations.

To succeed, they must treat the project

as a separate unit with a different business

model and growth expectations; ask

what job do customers need to get done;

segment customers by job, not by product, market size,

or demographics; and develop basic, low-cost ways

to get the job done.

That's how Procter Gamble came up

with Crest White Strips, a cheap, do-it-yourself

alternative to an expensive dental service.

Disruptive innovation creates new markets

and reshapes existing ones.

To achieve growth in a fast-changing world,

you want to be a disruptor.

Don't be disruptive.