Lecture L09
THE INNOVATOR’S DILEMMA
NMENT
NG ASSIG
READI
Economist article: The last Kodak moment?
!

Kodak is at death’s door; Fujifilm, its old rival, is th...
Founded in 1880

Noted for their 

pioneering technology
“You press the button,

we do the rest”
By 1975 they had 90%
of f...
Technology is
one of the
major factors
in change
The Innovators Dilemma
	 Firms that 

	s u c c e e d in one generation of innovation
almost inevitable become hamstrung by...
Surviving Technological Change

What is it that kills successful

companies?
Understanding the Job
Clayton Christensen
professor at Harvard Business School
Reason for Failure?
If you become wildly successful 

because you do everything right, 

you're doomed
Traditional Concept of 

Good Management
Focus on your best customers
Focus on your highest margin products

Source:	
  Ya...
The RPV Theory
Resources, Processes and Values Theory
	
  
R e s o u r c e s (what a firm has), 

p r o c e s s e s (how a...
WHEN
P L AT F O R M
S H I F T HAPPEN,
COMPANIES FIND
IT HARD TO MOVE
TO NEW
GENERATION OF
TECHNOLOGY
Only ONE established firm
managed the transition from one
generation to the next
Image	
  Source	
  Page:	
  http://www.te...
Why did they fail?
They listened to their

customers
Case Study
Betware transformed
from custom software
development to
product development
– from technology to
service
If I’d asked my
customers what
they wanted,
they’d have said a
faster horse
- Henry Ford
We tend to view technology
based on 


past usages 


but not the future potential
The hardest things when you are trying to affect change
!

Steve Jobs Insult Response, WWDC 1997
Traditional Concept of 

Good Management
Leads successful companies to ignore
disruptive innovations with deadly
consequen...
The Innovation Trap
“We listen to our best customers”
The Innovation Trap
“Our customer is asking for the
new product, but we don’t have it
and its to late the enter the market...
The Innovation Trap
“Our customer are starting to ask
for our new product.”
It is very difficult for incumbent
companies to disrupt themselves,
so usually others will do it
Markets that do not
exist cannot be
analysed	
  
!

- Clayton Christensen
New Technology Lecture L09 The Innovator's Dilemma
New Technology Lecture L09 The Innovator's Dilemma
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New Technology Lecture L09 The Innovator's Dilemma

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One of the great irony of successful companies is how easily they can fail. New companies are founded to take advantage of some new technology. They become highly successful and but when the technology shifts, something new comes along, they are unable to adapt and fail. This is the innovator’s dilemma.

Then there are companies that manage to survive. For example, Kodak survived two platform shift, only til fail the third. IBM has survived over 100 years. What do successful companies do differently?

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New Technology Lecture L09 The Innovator's Dilemma

  1. 1. Lecture L09 THE INNOVATOR’S DILEMMA
  2. 2. NMENT NG ASSIG READI Economist article: The last Kodak moment? ! Kodak is at death’s door; Fujifilm, its old rival, is thriving. Why?
  3. 3. Founded in 1880 Noted for their 
 pioneering technology “You press the button,
 we do the rest” By 1975 they had 90% of firm and 85% of 
 camera sales in US
  4. 4. Technology is one of the major factors in change
  5. 5. The Innovators Dilemma Firms that 
 s u c c e e d in one generation of innovation almost inevitable become hamstrung by their own success and thus doomed to 
 l o s e o u t in the next wave of innovation Source:  (Christensen,  2000)  
  6. 6. Surviving Technological Change What is it that kills successful
 companies?
  7. 7. Understanding the Job Clayton Christensen professor at Harvard Business School
  8. 8. Reason for Failure? If you become wildly successful 
 because you do everything right, 
 you're doomed
  9. 9. Traditional Concept of 
 Good Management Focus on your best customers Focus on your highest margin products Source:  Yang,  Harvard
  10. 10. The RPV Theory Resources, Processes and Values Theory   R e s o u r c e s (what a firm has), 
 p r o c e s s e s (how a firm does it´s work), and 
 v a l u e s (what a firm wants to do) 
 
 collectively defines an organisation’s strengths as well as weaknesses and blind spots Source:  (Christensen,  2000)  
  11. 11. WHEN P L AT F O R M S H I F T HAPPEN, COMPANIES FIND IT HARD TO MOVE TO NEW GENERATION OF TECHNOLOGY
  12. 12. Only ONE established firm managed the transition from one generation to the next Image  Source  Page:  http://www.teach-­‐ict.com/wp/archives/264
  13. 13. Why did they fail?
  14. 14. They listened to their customers
  15. 15. Case Study Betware transformed from custom software development to product development – from technology to service
  16. 16. If I’d asked my customers what they wanted, they’d have said a faster horse - Henry Ford
  17. 17. We tend to view technology based on 
 past usages 
 but not the future potential
  18. 18. The hardest things when you are trying to affect change ! Steve Jobs Insult Response, WWDC 1997
  19. 19. Traditional Concept of 
 Good Management Leads successful companies to ignore disruptive innovations with deadly consequences Source:  Yang,  Harvard
  20. 20. The Innovation Trap “We listen to our best customers”
  21. 21. The Innovation Trap “Our customer is asking for the new product, but we don’t have it and its to late the enter the market”
  22. 22. The Innovation Trap “Our customer are starting to ask for our new product.”
  23. 23. It is very difficult for incumbent companies to disrupt themselves, so usually others will do it
  24. 24. Markets that do not exist cannot be analysed   ! - Clayton Christensen
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