When faced with a disruptive technology, incumbent firms are usually pushedto move upmarket and compete in the marketplace where the new disruptive technology has not yet reached the capability requirements. 1 pointTrueFalse
Question
When faced with a disruptive technology, incumbent firms are usually pushedto move upmarket and compete in the marketplace where the new disruptive technology has not yet reached the capability requirements. 1 pointTrueFalse
Solution
True.
This statement is based on Clayton Christensen's theory of disruptive innovation. According to Christensen, when a disruptive technology enters the market, it often starts by serving a niche market that the incumbent firms overlook or ignore because it's not profitable enough.
As the disruptive technology improves over time, it starts to meet the needs of more demanding customers. This forces the incumbent firms to retreat and focus on the more profitable, upmarket segments of the market.
However, as the disruptive technology continues to improve, it eventually meets the needs of these upmarket customers as well, leading to the incumbent firms being pushed out of the market. This is why incumbent firms are usually pushed to move upmarket when faced with a disruptive technology.
Similar Questions
Established firms’ responses to disruptive technology are generally ineffective due to a failure to explore the new technology.1 pointTrueFalse
Disruptive innovations are often created by startups and small businesses that are not afraid to challenge the big players. They start by targeting a small or underserved market, and then they gradually move upmarket as their product or service improves
Organisations pursue disruptive innovation at the higher tier of their markets because this is what has historically helped them succeed. Group of answer choicesTrueFalse
What is Christensen’s most well known recommendation for dealing with disruptive technologies? 1 pointWhen a disruptive technology enters a firm’s mainstream market, the firm should respond immediatelyForm an independent organization within the firm of experienced employeesFirms should stay close to their big customers Firms should avoid ambidexterity at all costs
Which of the following is an example of disruptive innovation?*1 pointImproving the efficiency of an existing manufacturing processIntroducing a new product that captures a small market nicheCreating a technology that renders existing products obsoleteNone of the above
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