Consider the rise of steel "minimills," a classic case of disruptive innovation. The traditional steel-making process involves massive, integrated mills that cost billions of dollars and produce high-quality steel. Minimills, which use electric-arc furnaces to melt scrap steel, are much smaller in scale, less expensive to build and operate, and can produce steel at about 20 percent less cost than traditional mills. But when they were first introduced, minimills produced steel of low quality, suitable only for concrete reinforcing bars (rebars).
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