What is Disruption?

Christensen's theory of disruptive innovation explains why great companies fail. Incumbents focus on their most profitable customers and continuously improve their products along traditional performance dimensions. Disruptors enter at the low end or in a new market with a product that is initially inferior on traditional metrics but superior on accessibility, simplicity, or price.

The key dynamic is that disruptors improve faster than customer needs evolve. As the disruptive product gets "good enough" for mainstream customers, it captures the market at much lower prices. By the time incumbents respond, the disruptors have built scale, learning, and brand loyalty that are hard to overcome.

In case interviews, disruption analysis is powerful for both offensive and defensive strategy. On offense: Is there an underserved market segment we can enter with a simpler offering? On defense: Are there disruptors emerging in our market, and how should we respond? Note that not every new technology is disruptive—sustaining innovations improve existing products along traditional dimensions and typically favor incumbents.