Exploring the duality of disruptive innovation: a technology-utility model analysis of market encroachment

Abstract

This study explores and explains how duality enables disruptive innovation to encroach on the market and redefine its boundaries under constraints of consumer preferences, purchasing power, technological performance, and complementary technologies. The findings indicate (1) disruptive innovation introduces a new value dimension into the market and enhances the heterogeneity of consumers’ demand, which creates prerequisites for its market encroachment while avoiding competing directly with incumbent enterprises; (2) when considering purchasing power constraints, the disadvantage of disruptive innovation in the preexisting value dimension becomes a price advantage of encroaching on the low-end market; (3) under the constraint of complementary technologies, disruptive innovation can open up new markets that incumbent enterprises have not yet touched by virtue of its advantages in the new value dimension; (4) disruptive innovation does not rely on technological performance to encroach on the market, indicating technological performance is not a necessity for identifying disruptive innovations.