A Firm‐Level Analysis on the Relative Difference between Technology‐Driven and Market‐Driven Disruptive Business Model Innovations

Abstract

Using the business model concept as a theoretical framework, this paper examines the relative disruptiveness potential between technology‐driven and market‐driven innovations. The study analyses retrospectively four case studies comprising two technologically sophisticated IT innovations and two technologically less sophisticated market‐driven innovations starting from their inception to the point of disruption over a period of 5–15 years. It finds that, while the disruption process of technology‐driven innovation conforms to the patterns predicted by disruptive innovation theory, the disruption process of market‐driven disruptive business model innovation depicts a bottleneck shape, where the positive effects of initial strategic choice, model specialization and investments on disruptiveness potential reach the maximum level and start to stagnate due to the same initial strategic choice and cost factors. Implications for researchers and practitioners are discussed.