Broadly speaking, a market disruptor may include a technology, method, process, service, or channel with superior performance and customer benefits delivered at an attractive price point that can unexpectedly displace an incumbent. Porter’s Five Forces, created by Harvard Business School’s then-associate professor Michael E. Porter, Ph.D., has provided a framework for taking a “snapshot in time” of any potential threat to a business’ profits (not limited to a business losing its customers to an existing rival).
Clayton Christensen (Harvard Business School professor) set out in his book, The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail, to successfully leverage disruptive innovation. Put simply, Christensen identifies two types of new technologies: sustaining technologies, which incrementally improve existing products; and disruptive technologies, which change a product’s core features. The latter enter the market as cheaper but inferior alternatives, or they “underperform established products in mainstream markets.” At first, they attract only customers at the margins; over time, however, a disruptive product’s performance improves, and eventually becomes good enough for mainstream markets. Incumbents have plenty of time to figure out how to work with the new technology. The challenge is to figure out how to avoid cannibalizing existing markets.