The Effect of Recession on Disruptive Innovation by Andrew Isherwood

The author had noticed that during times of recession the customer demand for increased performance can become negative, what once was not acceptable now becomes adequate due either to cost...

The author had noticed that during times of recession the customer demand for increased performance can become negative, what once was not acceptable now becomes adequate due either to cost restraints or simply customer’s plans for expansion requiring new higher performing products are cancelled. The author has observed this in the B2B markets. Applying this through Christensen’s Disruptive Technology lens ‘A’ on the left shows a modified demand curve for Tier A customers flattening or going negative over time caused by a recession.

Disruptive Technology During a Recession 1

Disruptive Technology During a Recession 1

However this does mean there might be a potential for moving up to the next Value Network with less effort during a recession. See the diagram below ‘B’ on the right which shows Technology B meeting Customer A’s demands sooner than expected due to the recession reducing their requirements.

Disruptive Technology During a Recession 2

Disruptive Technology During a Recession 2

 

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