||This research was conducted by case study to examine the innovation models of the packaged LED firms. Referring to Clayton M. Christensen’s disruptive innovation, W Chan Kim and Renee Maubourgne’s blue ocean strategy and Hermann Simon’s hidden champions theories, we deeply explored disruptive innovation practices of four packaged LED firms (ie., Ligitek, Everlight, Philips lumileds and Cree).
Under the challenges from the existing competition and the unknown economic en- vironment, those companies successfully found new markets and new customers through disruptive innovations. They have developed capabilities in disruptive in- novation, in- cluding product features, operation processes with various organization characteristics and management styles. In general, companies generate advantages from cost reduction and building higher entry barriers. They also create competitive advantages by entering purple markets.
LED industry in Taiwan dominates all over the world and wins the first and second place in product value and volume. When the market is getting saturated, the firm should cross the chasm through the disruptive innovation. For example,the firm should create innovations beyong blue oceans, think out of the box to survice, and expand into global markets through entrepreneurship. In conclusion, three key factors to generate competitive advantages: (1) know industry trend well, and then capture endless oppor- tunities, (2) identify and monitor competitors closely, and (3) create distinctive advan- tages for sustainable growth.