Disruptive Innovation And Evolution Of Industrial Organization

With the occurrence and development of disruptive innovation,market share of incumbents continue to decline,market competition become more intense.and in the long term,the disruptive innovation enterprises eventually subvert the existing enterprises.In the evolution of disruptive innovation and industrial organization,compared with incremental innovation,disruptive innovation behaviors meet the target market consumer demand preferences better,or even create new market demand.Disruptive innovation behaviors change,and influence consumer preferences.while consumer preference’s change has an effect on the behavior of enterprises.Compared with the assumption that consumer preferences are unchanged,disruptive innovation behavior and consumer preferences are endogenous interactive in the evolution of industrial organization.Under this background,this paper reveals the.disruptive innovation and industrial organization evolution mechanism based on the perspective of endogenous consumer preferences,deepens the understanding of drastic influence brought by disruptive innovation.In practice,this paper provides theoretical reference for business strategies and relevant regulatory policies.On the basis of the existing research,we further deepen the interactive relationship between disruptive innovation behavior and consumer preferences,and thus reveal the internal mechanism of industrial organization evolution.Specifically,first,this paper reveals the interaction of disruptive innovation behavior and consumer preferences,formulate the understanding of endogenous consumer preferences;then,this paper sets up the model to analyses disruptive innovation and the evolution of industrial organization based on endogenous consumer preferences;finally,this paper further elaborates the dynamic mechanism,market selection mechanism and adaptability mechanism.On the basis of the above basic research,two extensions are studied in this paper.The first extension is to explore the role of two exogenous factors,technological regimes and demand structure in industrial evolution.The second one is extended to examine the relationship between technological searching features and its fitness in the face of continuous disruptive innovation.This paper first surveys the literature on evolution of industrial organization,disruptive innovation and evolution of industrial organization,and disruptive innovation and industrial evolution based on endogenous preference.The survey deepens our understanding of consumer preferences and disruptive innovation,lay literature basis from the perspective of endogenous consumer preference to study disruptive innovation and evolution of industrial organization.This paper puts forward model of disruptive innovation and evolution of industrial organization based on endogenous consumer preference.We explore the consumer preference and disruptive innovation behaviors based on Lancaster product attribute theory and the theory of disruptive innovation.The framework focuses on market agents,disruptive innovation enterprise,sustaining innovation enterprises and consumers,and their behaviors.We explore the disruptive innovation behaviors in the perspective of endogenous preference from three aspects,i.e.,knowledge combination,knowledge searching and knowledge application.We also explain the dynamic mechanism,market selection mechanism,and adaptability mechanism based on knowledge management and market evolutionary theory.In the three mechanism,knowledge combination ability and knowledge searching speed is the main dynamic mechanism,speed for consumers’ second purchase,distribution of consumer preference,and consumer,learning ability are the main market selection mechanism.Disruptive innovation firms choose different innovation behaviors to adapt with different kinds of consumers’ preference to gain their fitness,which is the selection mechanism.We further to explore the endogenous consumer preference mechanism from three aspects,i.e.,formulation of different kind of market segments,endogenous change of consumer preference,and lock-in of knowledge searching.Through the above research,it will further deepen the understanding of the mechanism of disruptive innovation and the evolution of industrial organization based on the endogenous perspective of consumer preference.The above is the basic research of this article.On this basis,two extensions are studied.The first extension uses the historical friendly method to Chinese mobile phone market,identifies the main feature facts in the evolution of this industry,and provides theoretical analysis of the mechanism of technological regimes and consumer demand structure.This chapter explores the role of technological regimes and demand structure in the industry evolution during the transition from 2G to 3G by history-friendly analysis and history-divergent analysis.The second one examines the impact of enterprise technological searching characteristics on enterprise adaptability-under the influence of continuous disruptive innovation.Specifically,we use patent data of global digital switch industry to investigate how firms can maintain their innovative and technological impact in the face of continuous disruptive innovation.Research finds that knowledge breadth and knowledge depth are beneficial to enterprises to maintain sustained innovative capability.and their technological impactful capability.They are complementary.This paper finds that there is a threshold effect for knowledge depth,that is,it would restrain firms’ innovation performance if the knowledge depth is above the threshold.This paper deepens our understanding on the relationship between disruptive innovation and evolution of industrial organization,lay foundation for analysis of evolution of industrial organization in perspective of endogenous consumer preference,and the three mechanisms.i.e.,dynamic mechanism,market selection mechanism,and adaptation mechanism.This paper provides new perspective of endogenous consumer reference for analysis of disruptive innovation and evolution of industrial organization.In practice,this paper provides reference for firms to allocate resources according to the characteristics of consumer demand to improve the environmental adaptability.