Is This Innovation Disruptive? A Case from Japanese Contact Lenses Market

“Disruptive innovation” is one of the most powerful concepts in the field of innovation research.  It transforms established value networks, and eventually disrupts existing markets.  Despite popularity among academics and practitioners, it it hard to find clear-cut criteria to determine whether a given innovation is considered a “disruptive” or not.  In this paper, the authors try to reexamine the definition of “disruptive innovation”, based on an extensive case study of Japanese Contact Lenses, or CL, market.

During the late half of 1990s, a drastic market share turnover was witnessed in Japanese CL market.  The market has been dominated by domestic companies, such as Menicon or Seed.  Foreign entrants, Johnson & Johnson or J&J, Bausch & Lomb or B&L, and CIBAVision have expanded their market shares.  After the market entry, J&J had become a market leader in a short period of 7 years.

 Product innovations can be one of the biggest reasons for such a rapid turnover.  Foreign companies are eager to introduce Disposable Contact Lens, or DSL, to the Japanese market.  J&J introduced “Acuvue” to the US market in 1988, as the world first DSL.  In 1991, J&J entered Japanese market with DSL, and had increased market share rapidly.  B&L and CIBAVision had also push DSL strongly to the market, and gained market shares during the late half of 1990s.

DCL are free of maintenance, because users throw away used lens before cleaning is needed.  DCL’s initial cost is much lower than conventional contacts.  In mid 1990s, it is believed that a first time user of DCL payed approximately 50 US dollar or 5000 Japanese yen, in contrast with 300 USD or 30000 JPY for conventional contacts.  DCL was convenient to trial users, almost of all first time contacts user chose the disposable ones.  Contact lens users in Japan had drastically increased from 8.6 million in 1994 to 17.6 million in 2005.

In contrast with the foreign entrants, Japanese established incumbents lost their competitiveness.  In this paper, we will try to find out reasons why incumbents were reluctant to sift their product lines to DCL.  Was DCL a disruptive innovation to incumbents?  We will compare natures of innovations between Contact Lenses and Hard Disk Drives, which was the main case of Christensen’s original discussion of “Disruptive Technology”.  

We reexamine the concept of disruptive innovations, and discuss that trade-off among various performance measures can be essential to define technological disruptiveness.