Will There Be Disruptive Innovation? Identifying Profitable Niche Segments and Product Designs for Small- and Medium-Sized Companies and Startups
- Authors
- Choi, Hyunhong; Ahn, Joongha; Woo, JongRoul
- Issue Date
- 10월-2022
- Publisher
- IEEE-INST ELECTRICAL ELECTRONICS ENGINEERS INC
- Keywords
- Disruptive innovation; Companies; Technological innovation; Product design; Leadership; Bayes methods; Disruptive innovation; market entry strategy; market segmentation; niche market; product design; wearable device
- Citation
- IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, v.69, no.5, pp.2057 - 2072
- Indexed
- SCIE
SSCI
SCOPUS
- Journal Title
- IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT
- Volume
- 69
- Number
- 5
- Start Page
- 2057
- End Page
- 2072
- URI
- https://scholar.korea.ac.kr/handle/2021.sw.korea/142715
- DOI
- 10.1109/TEM.2020.2999073
- ISSN
- 0018-9391
- Abstract
- When an established incumbent already exists in the market, new entrants may consider special entrance strategies for entering that market. Disruptive innovation theory suggests that new entrants may start from a low-end market and then expand into mainstream markets. A recent debate on the theory has questioned its generalizability, but such controversy originates from the attempt to apply it to any business success by a new entrant. However, different innovations require the application of different theories. Therefore, this article identifies a profitable niche market for startups and small- and medium-sized companies based on consumer preferences and determines whether disruptive innovation is likely to emerge in a particular market context. Specifically, this article investigates whether the low-end market is the profitable niche market for market entrance. It uses a choice experiment and a hierarchical Bayesian normal mixture model capable of capturing preference heterogeneity at both the individual and the segment levels to predict market entry implications in an ex-ante fashion for the wearable device market in South Korea. The characteristics of the identified niche market segment and entry product design imply that startups and small and medium-sized companies should be cautious when applying disruptive innovation theory in this context.
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Collections - Graduate School of Energy and Environment (KU-KIST GREEN SCHOOL) > Department of Energy and Environment > 1. Journal Articles
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