When Disruptive Meets Innovation

The words of “disruptive” and “innovation” have different individual meanings. The “disruptive” is associated to negative meanings meanwhile the “innovation” is normally associated to more positive meanings. When they are mixed together, still having a paradoxical meaning as a so-called “Disruptive Innovation”.

Taken the definition from Wikipedia, the Disruptive Innovation is a technological innovation, product, or service that eventually overturns the existing dominant technology or status quo product in the market.

In terms of its target market, there are two kinds of Disruptive Innovation; they are aiming to 1). Lower-End Market and 2). New-Market. The Lower-End Disruptive Innovation is aimed at mainstream customers who were ignored by established companies. While a New-Market Disruptive Innovation is often aimed at non-consumption.

The disruptive technology is expected to dominate existing market by: 1). Filling a role that the older technology could not fill, or 2). Successively moving up-market through performance improvements until finally displacing the market incumbents.

Some market analysts believe that the challenge in grabbing wider (lower-end) market or new market can be reached through this Disruptive Innovation. In the developed country like Indonesia, the wider market comes from the middle-lower market segment as illustrated as the bigger middle-bottom pie of pyramidal shape. In this case the positive meanings of this Disruptive Innovation shall be enjoyed by customer/public. Meanwhile paradoxically it shall have more negative meanings for market incumbents.

As of lower investment and fast deployment for network infrastructure expansion, Telkom was introducing Telkom Flexi as fixed-wireless access (FWA) using CDMA-based technology platform. This strategy is believed as one option to catch-up the lagging of Indonesian telecommunication density amongst ASEAN countries. And this technology then was followed by Indosat StarOne which in-parallel is also become the second-positioned market incumbent of cellular. And when Mobile-8 Fren and Bakrie Telecom Esia came in-to the telecommunication market, this was the beginning of market disruption which changes the competitive landscape of both cellular/full- mobility and fixed-wireless providers.

If the market overturns of disruptive innovation strategy can not be achieved by new comers, eventually it could sacrifice the market with the intense unfair marketing campaigns/promises or delivering low quality of products and services. This phenomenon might be the major key driven of the growing demand of low-cost products and services. Unfortunately low quality products and services may only works for voice-based communication as haircut strategy to initiate the market share, but for further data/video streaming applications that need higher QoS (Quality of Service) it seems can no longer be maintained.