Figure 2-5. Value Innovation = The simultaneous pursuit of differentiation and low cost Disruptive innovation is a term that was coined by Clayton M. Christensen in the mid-1990s. In his book The Innovator’s Dilemma, he analyzed the value chain of high-tech companies and drew a distinction between those just doing sustaining innovation versus disruptive innovation. A sustaining innovation he described as any innovation that enables industry leaders to do something better for their [17] existing customers. A disruptive innovation is a product that a company’s best customer potentially can’t use and therefore has substantially lower profit margins than the business might be willing to support. However, this is where disruptive innovation can blindside established competitors. Christensen says that disruptive innovation usually is “a process by which a product or service takes root initially in simple applications at the bottom of a market and then [18] relentlessly moves up market, eventually displacing established competitors.” Innovative means doing something that is new, original, and important enough to shake up a market, and this leads us right back to the book Blue Ocean Strategy.