Is Disruptive Innovation coming to the Metrology Equipment Market?

Disruptive innovation, a term of art coined by Clayton Christensen, from Harvard Business School in 1995, describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.

As companies tend to innovate faster than their customers’ needs evolve, most organizations eventually end up producing products that are actually too sophisticated, too expensive, and too complicated for many customers in their market.

Companies pursue these “sustaining innovations” at the higher tiers of their markets because this is what has historically helped them succeed: by charging the highest prices to their most demanding and sophisticated customers at the top of the market, companies will achieve the greatest profitability.

However, by doing so, companies unwittingly open the door to “disruptive innovations” at the bottom of the market. An innovation that is disruptive allows a whole new army of customers at the bottom of a market access to a product that was historically only accessible to customers with a lot of money or a lot of skill.

Characteristics of disruptive businesses, at least in their initial stages, can include:  lower profit margins, smaller target markets, and simpler products that may not appear as attractive as existing solutions when compared against traditional performance metrics.  Because these lower tiers of the market offer lower profit margins, they are unattractive to other companies moving upward in the market, creating space at the bottom of the market for new disruptive competitors to emerge.

With the relentless pace of technological innovation in the metrology capital equipment supplier base, as witnessed at the recent Control Exhibition in Stuttgart, Germany, is the latest metrology equipment and software becoming too complex and too expensive for many of the smaller manufacturing companies who have the exact same manufacturing quality demands as the larger global groups? Will the metrology equipment sector witness the emergence of new entrants harnessing the latest technological innovations but offered in more simplistic and affordable packages?

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The metrology equipment market is growing across the globe with profitability, at most major equipment suppliers, at record levels. The question is “are they relentlessly chasing the emerging and predicted growth markets at the expense of ‘grass-roots’ customers?” Will we see new entrants bringing new disruptive innovations to market as the market segments further? One thing is for sure there is a lot happening out there in the sector and Metrology.News will continue to bring all the latest news to our readers as it happens.

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