By now, most of us are familiar with Clayton Christensen's ideas about innovation. He warns us that big companies need to look out for the disruptive technologies that spread from the bottom up while they transform markets. Now, from Strategy + Business comes a piece that says top-down disruption is just as likely.
In stark contrast to the bottom-up variety, top-down disruptive innovations actually outperform existing products when they're introduced, and they sell for a premium price rather than at a discount. They're initially purchased by the most discriminating and least price-sensitive buyers, and then they move steadily downward, into the mainstream, to recast the entire market in their own image. A top-down disruption is as revolutionary as a bottom-up one. But the good news for incumbents is that they have a much better chance of surviving, or even spearheading, the former than the latter.
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