Final answer:
Disruptive innovations are designed to be incompatible with existing standards and value chains and must build new markets from scratch. These innovations often displace established products, leading to significant industry changes.
Step-by-step explanation:
The innovations that are intended to be incompatible with existing standards and value chain, and that need to develop markets de novo, are known as disruptive innovations. Disruptive innovations are those that create a new market and value network, leading to a significant change in the industry or sector. They often displace established market-leading firms, products, and alliances. Examples of such innovations include the personal computer displacing typewriters, smartphones overtaking feature phones, online retailers disrupting traditional brick-and-mortar stores, and streaming services changing home entertainment.
These innovations usually start in niche markets and eventually grow to dominate, transforming sectors and creating new industry standards. Companies that introduce disruptive innovations can earn higher income and profits as they capitalize on the new markets they've developed. However, for existing firms that fail to adapt, these innovations can lead to reduced income and market share.