Exploring Disruptive Innovation: Case study on Multi-sided Platforms

University essay from KTH/Skolan för industriell teknik och management (ITM); KTH/Skolan för industriell teknik och management (ITM)

Abstract: Purpose - The purpose of this research is to explore disruptive innovation and to determine whether Christensen’s latest version (2015) of the disruptive innovation theory can explain the success of multisided platforms in the music industry. Thus, we analyze three cases studies based on the theory: Napster, Spotify and Apple Music. At the end, we present our results concerning Christensen’s theory’s capability to explain the recent success stories of digital multisided platforms. Research Question - “Does the theory of disruptive innovation explain the success of Multi-sided Platforms in the music industry?” Methodology - A comparative case study with three levels of success gives us a width that we think is necessary in order to draw conclusions. Spotify is considered to be a global market leader while Apple Music is highly successful and market leader in the US. Napster, however, is not considered successful due to the legal issues it has encountered. Secondary data is used on all cases, and an in-depth literature review of the theory which supports the theoretical framework that we use to compare the cases. Findings - This research explores Christensen’s theory that is widely misinterpreted and misapplied in the recent years. Christensen’s theory is heavily built upon a technology factor that drives disruptive innovation, however, this can not explain for instance Spotify’s success, which is according to the original theory is not disruptive. We argue that business model innovation is the driver of disruption in some cases where technology is merely an enabler for business to reach disruptive effects. We would like to propose a stronger categorization of disruption types, such as “technology driven disruption” or “business model driven disruption” in order to identify disruption with different roots.

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