Exploring what disruptive innovation is and its influence on Spanish incumbents

Abstract

Disruptive innovation has become one of the most renowned types of innovation in the business world. The results of the preliminary review of the literature on this theory have revealed interesting questions about how exactly disruptive innovation (DI) is to be understood. The complexity of this theory has given rise to a series of inquiries aimed at generating a full understanding of the true position of DI in the business world. Consequently, the overarching objective of this thesis is to contribute to the literature on DI theory by exploring such questions as what is already known about this theory, and how much it influences incumbents located in Spain. In pursuit of the objective, it is proposed a compendium of three contributions corresponding to the central chapters 2, 3 and 4, respectively, of this thesis. First contribution: “Clarifying the disruptive innovation puzzle: a critical review”. Purpose: Disruptive innovation theory has attracted the interest of researchers and practitioners across many areas, resulting in the development of new business models and strategies. Despite the increasing scholarly attention, its definition has not yet been understood, the understanding of the term “disruptive” and the complex nature of this innovation has provoked some misinterpretations, and the meaning remains ambiguous. To address this confusion, this study undertakes a critical review of DI in an attempt at providing a solid theoretical grounding. Methodology: The review examines the key issues of published articles, identified after conducting a search in the Web of Science scholarly database. The analysis highlights the basic definitions of DI, showing its evolution, types, and its characteristics. This contribution also examines the behaviours adopted by the actors associated with disruptive innovation (i.e. incumbents, entrants, and customers). Findings: Overall, this contribution finds that DI has its own elements to be identified and requires in-depth analysis to avoid confusing it with other innovation approaches. The findings suggest that DI affects businesses and sectors in varied and complex ways because customers from low-end market and mainstream market appreciate this innovation. Second contribution: “Meaning and relevance of disruptive innovation to Spanish incumbents: a qualitative research study”. Perusal of the literature on DI reveals a pressing need to understand the influence of this type of innovation on incumbents’ activities, for it threatens their leadership, breaks the rules in many industries, and its influence does not seem to have geographic borders. The role of top managers is critical in order for incumbents to develop this type of innovation, but we know little about the way they approach the matter. To address this gap, this contribution uses face-to-face interviews with a sample of 20 incumbents located in Spain. The findings suggest that DI is popular and attractive for incumbents but there are many challenges due to a lack of understanding of this theory. This study contributes to the literature by showing (1) how DI influences incumbent activities; (2) the managerial implications and (3) approaches that should be taken into account in order for incumbents to achieve DI, as well as providing new insights on this theory in the context of incumbent environments. Third contribution: “Spanish incumbents tackling disruptive innovation development: a qualitative research study”. Many examples of DI have taken the leadership in the mainstream market where incumbents played. Currently, incumbents, small companies and entrepreneurs are interested in developing disruptive innovations. However, this evolving phenomenon has put under very serious pressure to incumbents. Successful examples of DI seem to foster them to bet for it. Incumbents are interested in harness this innovation and find opportunities to be disrupters, in their effort they have started to explore, and to act in order to tackle it. By conducting a qualitative research through semi-structured interviews to 20 top managers of incumbents located in Spain this study answers the following research question: What are the main management priorities, key factors, and challenges for incumbents in relation to tackling disruptive innovation? Findings show that DI has been influential on incumbents’ actions because it is considered as a great opportunity to be different and to lead the market. There are interesting approaches concerning management priorities carried out by incumbents when tackling DI, some important common key factors and challenges are analysed. Finally, this thesis provides more extensive discussion of disruptive innovation theory and its influence on incumbents and the results of this dissertation have useful implications for innovation management practice.