" Effects of Disruptive-Innovation on industry-level” “IKEA-store” case study

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The British University in Dubai (BUiD)
Disruptive innovation is a concept that was conceived in relation to the technology industry however, soon it was adopted by businesses around the world. The idea behind this type of innovation is that it changes the business model of the company and creates new uses and markets for the innovation even though the innovation may come in an existing product. The main characteristic of this type of innovation is that it may come from outsiders of the industry and the companies who fail to adapt to the innovation are left behind. In such a scenario, IKEA has been a company that has not only remained successful but has also been able to take its simplistic house design model to the different countries that it has expanded into. The company has also changed its business model to suit the various markets, to the extent of entering into totally new and different businesses to suit the market conditions. Thus IKEA forms a case for how companies must manage themselves internally as well as externally to remain strong in the face of challenges posed by disruptive innovation. The present study analyses in what way the industry is affected via disruptive-innovation. For this purpose, the 13-factor framework of disruptive innovation are considered. The research involves both qualitative and quantitative analysis to understand how the industry and particularly IKEA is performing in the face of disruptive innovations. The thesis concludes on how the industry may be affected in the future and makes recommendations on how the companies can stay strong in the face of imminent innovations and the challenges posed by them.
disruptive innovation, business models, value-migration, value-network, IKEA-store