Growth framework for incumbents in response to disruptive innovation

Abstract

Many literary articles and research papers have delved into around disruptive innovation: From what is a disruptive innovation to how different is it from sustaining innovation? What are the quintessential for a successful disruption? How do incumbents usually react to these disruptions? What are the factors affecting the incumbent’s response? Extensive studies have been done on various industries ranging from hard disk to electric vehicles to real-estate broking industry. Drawing useful insights from these articles and literature, we have attempted to define a framework on how incumbents’ response should be in the face of disrupting innovation in the respective industry. For the purpose of paper, we have analysed the disruption caused to the Indian broking industry by new-age discount brokers such as Zerodha. We have specifically delved into issues such as ‘Whether the business model / product is a disruptive innovation for the broking industry? Was there a gap in the industry that was filled by Zerodha? What has been the different responses of the incumbents? What factors drove those responses and can a generalized framework be created to decide on a response strategy to any disruption?’