Managing Disruptive Innovation: What can Existing Firms Do?

【Abstract】Disruptive innovation explains the process of a product or service preliminary application initiating from the bottom of the market that replaces an already established product or service. It has created a significant impact on management practices in all types of industries. This paper takes VR as an example to explain the importance of companies to embrace disruptive innovation.

【Key words】Disruptive Innovation; VR; Strategies

【作者簡介】劉春迪，天津外國語大學濱海外事學院。

I. Introduction of Disruptive Innovation

Disruptive innovation has a proven advantage to foster creativity through innovation and the ability to cultivate a sustainable and competitive advantage when properly strategized. Inevitably， the new innovators growth attracts the attention of already well-established players. Soon， established companies cannot afford to ignore the new way of doing business anymore and will begin to consider ways to respond （Charitou&Markides， 2003）.

II. Disruptive Innovation in VR Industry

The internet， smartphones are all examples of disruptive innovation. Virtual Reality （VR） is being added to this list. In the next few years as technology improves， VR will sweep the world as the next major technological disruption （Will， 2016）. From preforming virtual medical procedures， to training soldiers in a non-lethal setting for battle， the uses for virtual reality are truly limitless.

1. Change in Entertainment

The two elements， conversation and player-input gaming， can be used to create a world which appears to be uniquely realistic， the game can “Put you in situations that you would never be able to or want to， experience firsthand.”（Richard， 2015） Films and television have been the primary focus of VR until recently， with the breakdown of the barriers which separate the film and its viewers.

2. Change in Medical Science

Another area that virtual reality has proven its use is in the medical field. VR technology has been utilized to train medical professionals in being more precise. In the past， animals were used to preform operations with varying degrees of success. Since there are major differences between humans and most other mammals， an operation can only be similar to a certain degree as a live human （Carson， 2015）.

3. Change in Work

This new technology will also be used to simulate real life interactions between employees within the workplace. Instead of video chatting and web seminars for training， businesses will use the technology to create a face-to-face virtual environment where employees can communicate. Not only can this technology put you with others when separated physically， but it could also can simulate training for employees.

III. Conclusion

An important key factor in determining a companys long-term success is not just reacting to economic trends， but rather a willingness to persevere and sustain an allied focus through the creation of value that is prepared， while at the same time， better managing risks， growing revenue， and gaining market share （Harris， 2008）. To achieve highly sustained and profitable growth， companies must break away from circle of the competitive and imitative trap. Rather than striving to match or outperform the competition， companies must cultivate value innovation. Knowledge and ideas are infinite economic goods that can generate increasing returns through a highly engaged systematic use （Kim & Mauborgne， 1999）.

References：

[1]Carson， E.. 10 Ways Virtual Reality is Revolutionizing Medicine and Healthcare[J].2015.

[2]http：//www.techrepublic.com/article/10-ways-virtual-reality-is-revolutionizing-medicine-and-healthcare/[OL].

[3]Charitou， C. &Markides， C.. Responses to Disruptive Strategic Innovation[J]. MIT Sloan Management Review，2003，44（2）：55-63.

[4]Darell， R.. Is Virtual Reality the Next Big Thing in Entertainment [J].2015.

[5]http：//www.bitrebels.com/entertainment/virtual-reality-next-thing-entertainment/[OL].

[6]Harris， D.. Creating value through innovation. Community Banker，2008：10-10.

[7]http：//search.proquest.com.library.capella.edu/docview/195163429？accountid=27965[OL].

[8]Kim， W. & Maubourgne. Strategy， Value Innovation， and the Knowledge Economy[J]. Sloan Management Review，199940（3）：41- 54.

[9]Will， N.. Virtual Reality： The Next Disruptive Technology，2016.

[10]http：//seekingalpha.com/article/3965958-virtual-reality-next-disruptive-technology[OL].