What is meant by disruptive innovation?

Disruptive innovation refers to a new product, service, or business model that fundamentally alters the way an industry operates, often creating new markets and displacing established market leaders. It typically starts at the lower end of the market or targets a niche that has been overlooked. Over time, disruptive innovations gain traction and eventually cause significant shifts in consumer preferences and industry dynamics.

The core of disruptive innovation lies in its ability to provide a simpler, more convenient, or more affordable alternative to what is already available. This means that it not only changes the product or service landscape but can also reshape the behaviors of consumers and the strategies of competitors in the industry.

Other options describe improvements or marketing schemes but do not encapsulate the essence of disruptive innovation. Major upgrades to existing products and the introduction of vastly improved technology focus on enhancements rather than fundamental market changes. A marketing strategy used by large corporations pertains to promotional tactics rather than the transformational nature of a disruptive innovation. Thus, the correct understanding of disruptive innovation emphasizes its capacity to significantly change the market landscape.