The Disruptor's Dilemma: Exploring the Dynamic Optimal Distinctiveness Mechanisms of Disruptive New Entrants in Value Co‐Creation

ABSTRACT Disruptive innovation research highlights a central tension faced by new entrants: the disruptor's dilemma where firms must simultaneously challenge established norms to maintain differentiation and conform to industry standards to gain legitimacy. Although this tension has been described as ‘being the same and different at the same time’, little is known about how disruptive entrants achieve optimal distinctiveness in value co‐creation. We address this gap through a longitudinal analysis of BROAD, a pioneer in green technologies. By developing a process model, we demonstrate how BROAD navigated stakeholder relationships by continuously adjusting its strategies and identifying windows of opportunity for market entry. Our findings show that, as value co‐creation progresses, the mechanisms of optimal distinctiveness evolve from threshold and integrative strategies to compensatory orchestration. Optimal distinctiveness emerges as both a phased orchestration and an iterative, organic process—progressing from a single technology to a product chain and eventually to a technological system. Through this mechanism, disruptive entrants may become incumbents by persistently identifying and acting upon distinctive entry opportunities. This study advances the understanding of power and resource asymmetries in value co‐creation by illustrating how disruptive entrants can resolve the disruptor's dilemma through dynamic orchestration of distinctiveness.