Disruptive Innovation Theory and its Application on Brewdog

Innovation Theory

Identify Few Business Models That The Company Use Uses a Subscription Model, Video Streaming Model, Internet Based Model Etc) Students Should Also Provide a Business Model Canvas

How The Company's Product/Service Developed Through The Years To What It Is Now. We Want To See The Application Of The Chosen Theory In This Development Context

 Identify Few Future Plans (Future Pathways) From The Company's Website/Internet..Moreover The Students Should Come Up With Few Creative Ideas.

The organization that has been selected in the report is Brewdog, and the theory that is being applied for the purpose of innovation is disruptive innovation. Upon this concept, there is a great value that can be adequately understood, it does also very favourable for inventors and corporations. With the implication of this innovation, it does help in recognizing several opportunities and position innovation that can be added as the disruptive advantage. Several business leaders use this innovation theory so that it does proactively avert the external threats, as there are nurturing opportunities for future growth. The innovation theory is being considered as it does look beyond the technologies and also at the same time, it helps in understanding the barriers which are certainly unrecognized and the low-end users remains unfulfilled. The disruptive theory does have several considerations, which includes business models, services, and experiences of consumers that will help in providing the access, convenience and cost-effectiveness. The term “disruptive innovation” has been given by the professor of Harvard Business School, Clayton Christensen.  

Disruption can be defined as the process in which a medium-size organization, with a limited amount of resources, can able to establish them into an incumbent business. In that stage, it is necessary and also to focus for the improvement of products and services that have more demand in-between the consumers, and it is dependable for the organization if they need for some segment and can ignore the need of others(Smith 2018). The disruptive innovation will be better understood with the help of that diagram which has been explained below.

From the above diagram that has been presented, from there it can be understood that the red line that has been drawn, it implies that the product performance trajectories which means that how the products and the services that are provided by the organization. The blue line is indicated by the willingness of the consumers that are able to pay the prices for products which is mentioned as customer demand trajectories(Smith 2018). There are several organizations that produce high-quality products or services, where the profitability is highest for the satisfaction of consumers in the high-end market. With this implication, it does meet the need for low-end consumers and for the mainstream consumers(Harrison and Leitch 2018). For this, there is a higher possibility for the entrants so that they can enter into the less profitable segments that the incumbents are neglecting. The entrants of the disruptive trajectory that has been marked with the lower red line can improve the performance in their offerings, and there is a possibility of moving to the market where the probability is much higher, though there will be a challenge to the dominance to the incumbents.

Definitions, Principals and Processes of The Theory

In today’s world, innovation is not the only thing that defines success, and it is not also about specific improvements to the products and making things better. There are certain things that have to keep in the mind of entrepreneurs, i.e. disruption and innovation(Hakala, Niemi & Kohtamäki 2017).To help particular organization, there are some principles which the business owners can follow for the betterment of their organization, which has been stated below:

Not all the innovation is Disruption: In terms of Merriam Webster, disruption is something which many of us does if they are unable to continue in that way(Bertilsson and Rennstam 2018). In considering this definition, it can be seen that if this principle is applicable to this business that will be anything that does enter into the market, that can be termed as disruptive.

Disruption can be low-end or new market: There are two varieties of the disruption, one is low-end disruption, and the other is new-market disruption. In the low-end disruption, it does refer to those businesses that usually comes in the bottom of the market, and it serves the consumers in a very usual way. This is for the lower profit markets, and upon the new business enters, it has to move to the upstream(Kelliher and Richardson 2019). Furthermore, it is essential for them to focus on a higher profit margin. In the new market disruption, the organizations do have competition against the non-consumable products that are in the lower margin sectors in that particular industry(Skog, Wimelius and Sandberg 2018).Similarly, as the low-end disruption, it can be seen that the products and services that are offered by the organization are not good enough, and organizations do make some profit in the lower prices.

Disruptive Innovation is a process rather than a product or service: According to the Clayton Christensen, it does take some time in determining whether the business innovation model will further succeed or not(Denning 2016). In describing this principle, it will be better in taking the example of Netflix, where the DVD-by-mail service did not satisfy the consumers in a big way. After the shift of the business model, Netflix does have a massive growth upon the on-demand streaming services.

For example, with the implication of disruptive theory by Uber, they have a strong performance as the explanation of warranty. In the case of Uber, it is a much-fetched organization in which through the use of the application that is provided the consumers can use the services, the organization is providing rides with drivers(Biber et al. 2017). The organization was founded in the year 2009, and Uber has a really fast growth compared to the other organization upon the implementation of this innovation model. There is a significant financial success that has been shown in a little amount of time. Upon the achievements that are related to the economic and strategic, it does not qualify as per the theory has been stated, but there is the certain reason through which the organization has described the way as it is.

Uber does have massive growth in the short amount of time, and that is also because of the vast popularity and increase of demand between the consumers; as it provides a less expensive solution to a widespread consumer(Ozalp, Cennamo and Gawer 2018). As per the theory, the disrupters do have started by appealing the unserved consumers and the low-end consumers, and after that, they migrate to the mainstream market. In the case of Uber, it has done just the opposite, what it did is firstly they made a position in the mainstream market, and after that, they appealed to the historical segment that is overlooked.

In the strategy of Uber, it was about sustaining the innovation. It has been seen many times that it has rarely been stated as inferior to the existing taxis, as the matter of fact most of the people would say that it is much better(Reinhardt and Gurtner 2018). At the time of booking of rides, there is just a requirement of few taps in the smartphone; the payment that has to be given for the trips has options both in cash and cashless and lastly after the ride is completed the passengers can rate the driver that will help in ensuring that the high standards of services which Uber is providing(Millar, Lockett and Ladd 2018).Moreover, Uber do deliver services which the consumers can rely on and also the driver is punctual; the price which they take form the consumers are competitive, compared to the taxi services.  

In this theory of disruptive innovations, it mainly helped two types of markets, which the incumbents overlooked. There is an existence of the low-end footnotes as which has been typically more profitable, and the consumers also get their demanding products and services(Møller et al. 2017). It can be seen that the organizations sometimes overshoot the performance that is required by the consumers. The disrupters do create am market where none has existed, which is in the case of new-market footholds. According to professor Clayton Christensen, there are several aspects of success and failure of the business, which are in terms of Disruptive innovations(Christensen et al. 2018). The disruptive innovation is those that do allow the new product and services to get the foothold in that particular market which can be appealing to the non-users and also to the low-end users of the product or service that are offered by the organization(Kilkki et al. 2018). In several terms, this theory of innovation can be worse at the time of establishing the metrics, and there is some expectation of the consumers in the markets that are mainly in the existed market with the reduced cost, that has been increased upon the convenience and the ease of use.

The innovation can be introduced in various ways, upon which that has been motivating the incumbents in the area that will be avoided upon the direct competition. The incumbents are usually motivated, rather than fighting a head-on battle with the new entrants of the market. In the end, there has been an improvement of disruptive innovation that can be improved, and the consumers get attracted to it that can be a pain to the incumbents.

From the above diagram, the path of disruption has been displayed, where there is a plot of performance against the time. It has been considered as the innovation that has been considered as worst that has been ignored by the incumbents, though it is appealing to the new consumers that can sustain the change until it becomes the threat(Kaspar 2019).  

Brewdog is craft beer brewing business that was founded by James Watt and Martin Dickie in the year 2006, which is located in Fraserburgh, Scotland. It started its operation in April 2007, and currently, it is Scotland’s largest independently owned brewery that produces at least 2,00,000 bottles per month. The organization Brewdog is considered as the ‘disruptive thinker’, and it uses strategy, consumer offerings and all the market building with its own that with the range of unique branded beer products that are available in the market, which capture the imagination of consumers(Addo and Fielt 2019). The organization has created its own market space; it has been done through the promotion of a unique and memorable product. In the year 2008, they have introduced their product in the market of the United Kingdom and in 2009it does become the United Kingdom’s fastest beer brand. One of the essential key aspects of Brewdog is that they focus more on their marketing so that the consumers do get information about the current products(McDowall 2018). Some of the marketing events are listed below:

In the year 2010, Brewdog has lobbied Westminster, that has been called as ‘The World’s Smallest Protest’, it was the attempt that has been for the UK licensing laws which will stipulate beer and can only be served in the third, half or full-print measures. The organization has also introduced the ‘two-thirds’ measured, that has succeeded in changing the law.

Before the year of the 2012 Olympics, they have introduced a special edition beer that has been named as “Never Mind the Anabolic”, which contains steroids and also other substances that is popular, though it is banned among the athletes.

To mark the 2014 winter Olympics, Brewdog has released the beer which was named “My name is Vladimir”, that has been for the protest of President Putin’s archaic laws which is related to the homosexuality(Hopp et al. 2018). The product packing, advertisement and also the slogans are also for the protest.

BrewDog is one of the more significant innovation compared to the others in that time as it has displayed the traits of disruptive innovators that have been highlighted in the Innovator’s DNA, by Jeff Dyer, Hal Gergersen, and Clayton M. Christensen. At the time of implementing, they have identified the five traits and the skills that have distinguished innovation upon the entrepreneurs from the BrewDog. It is essential to notice that the innovators do have the expertise which is known as the “associational thinking” (Gomber et al. 2018). With this, the innovators do get several directions that do get in making the connections across that do have unrelated questions, ideas and problems. The innovation does have a breakthrough in the intersection of the diverse disciplines and fields.  

Brewdog has a tremendous growth which can be seen in the last ten years, and the team members do believe that it is because of the theory that they have applied and because of the revolutionary and authentic Corporate Social Responsibility initiative. It has been explained many of the senior authority that the employees are happy, and they are also engaged through which the success of the organization does come (Lester 2018). There are also several policies that have been applicable for the employees, one of them is Living Wage employer, that has been from the year 2014, which has helped with different causes and benefitted from that growth. There is also the Unicorn Fund that is an extension for the founder’s commitment upon which they have believed(Templeton 2019). The vision of the organization is simple, and it has been as the leaders are very authentic, that will be for preaching and evangelizing.

Brewdog has recently announced seven new collaborations with some of the best craft brewers in the United Kingdom which are listed below:

• Deya Brewing Co
• Northern Monk
• Wild Beer Co
• Verdant
• Magic Rock
• Fierce Beer
• Buxton

Brewdog has also launched ‘The BrewDog Network’, that does contain amazing contents from artisan spirits, travel, food and adventure. The shows that have been shown are less than 10% of the total network content, and that has been equally portrayed to the offerings to the distribution partners and viewers(Smith and Rupnik 2019). The organization has also thought of breaking the ground in Brisbane, that will start the construction soon, and that will be the first step for the organization in concurring the Southern Hemisphere brewery which will be one of the most important export markets.

Brewdog has unveiled “The BrewDog Blueprint, in which there is an ambitious business manifesto that has been packed with more than 30 bold initiatives which will evolve the beer business, and how it has collaborated with the global community in the coming years. It will be a new dawn for the brewery, and the blueprint does include the wealth of pioneering plans in which it does consists of the new beers, bars, and several new ways of doing the business. There is a project scope, where there will be a collaboration with the brewers of more than 90,000 strong community of shareholders, in which many of them do contribute several themes and has focused through the BrewDog’s Equity Punk Forum. In the blueprint for future development, there will be launches of various products and distribution innovation that the organization has been working on(Lundgaard and Rosenstand 2019). The organization will also expand in the area of Europe’s supply chain so that they can dominate in that region too. There will be a further evolution of Unicorn Fund which has been launched in the year 2016, from which BrewDog has the share of 10% profits among that team, and some of the benefits have also been shared with the charities. For the additional financial support, they have also provided with several materials which include ingredients and brewing materials that will be offered in its art laboratory for the beer analysis. It will further help in the growth of sales for introducing recipients for the international sales network. A barrel ageing programme has been launched so that it helps in reignite the heritage that has been for the barrel-aged shouts.  

Conclusion

From the above discussion, it can be concluded that the theory of Disruptive innovation has been applied by many of the organizations like Uber, Apple and Netflix etc., but growth in the business is not about the sales number and the revenue that they are earning. It is essential how the products are evolving and are the consumers are happy with the products that the organizations are delivering or they want more. In seeing the background of the organization, it has been observed that after the implication of the Disruptive innovation theory, the growth rate of BrewDog has been tremendously high. They have also been the market leader in several regions for a certain amount of time. One of the founders of BrewDog has stated that their mission is to develop in exceptional craft beer. It will be better for the organization if they carry their Disruptive Strategy, that will further help in gaining more market share and profits, which will provide more value to the consumers.

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