Disruption Theory and Value Innovation
2a1, DB 8004-01 Spring 2013

Houston, TX

Instructor: Dr. J
Outline
I. Introduction II. Innovation Theories a. Disruptive Innovation – Sustaining, Evolutionary and Revolutionary b. Value Innovation– Red and Blue Oceans c. Compare and Contrast Theories III. Case Study d. Apple Inc. i. Disruptive Innovation ii. Value Innovation IV. Conclusion

Introduction
Disruptive innovation has a proven advantage to foster creativity through innovation and the ability to cultivate a sustainable and competitive advantage over the competition when properly strategized. An important factor in determining long-term success is not just
What an entrant or incumbent must do is assuredly align not only the newest idea to expand through the market, but also one that will return a high dividend and investment to both the company and the consumer. By doing so, companies should want to embark upon a strategy that would dwarf conventional logic and make the competition irrelevant. One form of this type of pioneering innovation is the strategy of value innovation. A value innovative strategy would target the mass of buyers with an understanding that some consumers may be lost as well. Then going one step further to focus on key commonalities and total solutions beyond its industry’s traditional offerings. (Kim & Mauborgne, 1997)
Value Innovation
Kim, W., & Mauborgne, R. (1997) define value innovation as the simultaneous pursuit of radically superior value for buyers and lower costs for companies. Value innovation focuses on making the competition irrelevant by creating a leap in value for both the buyers and the company through opening up new and uncontested market space. Because value to buyers comes from the offerings utility minus its price, the assured value to the company is generated from the offering’s price minus its cost. Value innovation is achieved only when the whole system of utility, price, and cost are aligned. There are three platforms by which value innovation can take place: product, service and delivery (Kim & Mauborgne, 1997).
Kim and