Disruptive innovation is best described as:

• A. Changing existing products, services, or processes that radically change competition in the industry.
• B. Gradual improvements to existing products.
• C. Focusing on cost reduction in internal processes.
• D. Regulatory compliance innovation.

Answer: (A)

Disruptive innovation is about changing the way competition works in an industry by introducing a new approach that often starts simple, affordable, or more convenient and then improves to attract a larger market over time. It reshapes which offerings and players hold power in the field, not just making something a bit better. The described option fits this idea because it talks about changing products, services, or processes in a way that radically alters how competition is structured within the industry.

Incremental improvements to existing products stay within the current market framework and help current players perform better, but they don’t redraw the competitive landscape. Focusing on cost reduction in internal processes improves efficiency rather than delivering a new value proposition to a broader or different customer base. Regulatory compliance innovation centers on meeting rules and requirements, which is about governance rather than reshaping competition.