What are the differences between sustaining & disruptive innovations?

Sustaining and disruptive innovations are two distinct types of innovation that impact markets differently, often influencing the trajectory of businesses and industries. Here are the key differences, illustrated with topical examples:

1. Definition and Focus

Sustaining Innovation:

• Enhances existing products, services, or processes to meet the needs of current customers.
• Focuses on incremental improvements or refinements that improve performance or efficiency without fundamentally changing the market.

Disruptive Innovation:

• Creates new markets or fundamentally alters existing ones by introducing simpler, cheaper, or more accessible products or services.
• Initially targets underserved or new customer segments, often with inferior performance compared to existing solutions, but eventually overtakes mainstream offerings.

2. Impact on Markets

Sustaining Innovation:

• Strengthens established market players and reinforces their position.
• Maintains the current structure of the industry.

Disruptive Innovation:

• Undermines incumbents by redefining market dynamics.
• Shifts the competitive landscape, often favoring new entrants.

3. Customer Base

Sustaining Innovation:

• Focuses on meeting the needs of an existing customer base.
• Example: Apple's iPhone 15 Pro Max (2023) introduced a titanium body and improved camera features, catering to its loyal, high-end customers.

Disruptive Innovation:

• Targets new or underserved customer segments.
• Example: Zoom's rise during the pandemic (2020-2022) disrupted traditional video conferencing providers like Cisco's Webex by offering a simple, affordable, and user-friendly alternative.

4. Technology and Performance

Sustaining Innovation:

• Improves upon established technologies, maintaining or slightly increasing product performance.
• Example: Electric vehicle (EV) advancements by Tesla improve battery range, charging speed, and vehicle performance, sustaining its dominance in the premium EV market.

Disruptive Innovation:

• Often begins with inferior performance but is more accessible or affordable.
• Example: Nio's battery-swapping technology disrupted traditional EV charging paradigms, offering a faster and more flexible alternative.

5. Business Models

Sustaining Innovation:

• Works within existing business models and revenue streams.
• Example: Microsoft's Azure AI tools enhanced their cloud services, adding value for enterprise customers already invested in Microsoft's ecosystem.

Disruptive Innovation:

• Often introduces entirely new business models.
• Example: Airbnb disrupted traditional hotel chains by creating a peer-to-peer lodging market.