How to Identify Disruptive New Businesses

Review of Business & Finance Studies, v. 6 (1) p. 121-130

10 Pages Posted: 13 Dec 2014

Date Written: 2015

Abstract

In almost any industry, the most dramatic stories of growth and success were launched from a platform of disruptive innovation (Christensen et al., 2002). The probability of creating a successful, new growth business is 10 times greater if the innovators pursue a disruptive strategy rather than a sustaining one. Genuinely disruptive innovations are the ones that result in the creation of entirely new markets and business models. Few companies have introduced these innovations. Disruptive innovations appeal to customers who are unattractive to the incumbent companies. According to Christensen (2012) companies that want to create new growth businesses should seek disruptive opportunities because industry leaders will not be motivated to pursue them. The successful disruptive innovators always target customers who welcome simple products and affordable. The disruptive business model strategy needs to be sure that it is unattractive to every powerful incumbent. The purpose of this article is to present the concept of disruption from the perspective of a Social E-Commerce company that is the leader in group buying daily deals in Puerto Rico. In four years, Social Media Group obtained 80% of the market share of the group daily deal companies in the island. It achieved sales of $12.5 million in 2011 and $25 million in 2012. The owners are three brothers of less than 30 years old! The chief of operations is only 26 years old. This is an example of young genius entrepreneurs.

Keywords: Disruptive Innovations, Disruptive New Businesses, New Businesses Models, E-commerce

JEL Classification: M13, M19

Suggested Citation

Robles, Elizabeth, How to Identify Disruptive New Businesses (2015). Review of Business & Finance Studies, v. 6 (1) p. 121-130, Available at SSRN: https://ssrn.com/abstract=2497157

Elizabeth Robles (Contact Author)

University of Puerto Rico ( email )

Ponce De Leon Avenue
00931-3300
Puerto Rico

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