Innovators Dilemma Slides

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Innovators Dilemma Slides

  1. 1. Innovator’s Dilemma - Introduction Clayton M Christensen, HBS Press, 1997
  2. 2. Innovator’s Dilemma - Introduction Clayton M Christensen, HBS Press, 1997 <ul><li>Disruptive technology is often developed by established companies </li></ul><ul><li>Existing customers undervalue the changes which do not address their specific needs </li></ul><ul><li>Established players renew their focus on ‘sustaining’ technology development </li></ul><ul><li>New entrants intro the disruptive technology to small ‘fringe’ markets (attacker’s advantage) </li></ul><ul><li>Disruptive technology moves ‘upmarket’ </li></ul><ul><li>Established firms try to catch-up </li></ul>
  3. 3. Innovator’s Dilemma Why upstarts and not established players? High dependency on existing customers Initial market too small (relative to current) Uncertain potential, certain consequences Established Technology Disruptive Technology
  4. 4. Principles <ul><li>Dependency </li></ul><ul><ul><ul><li>Companies do not have ‘free reign’ because they depend on customers and investors for resources </li></ul></ul></ul><ul><li>Size </li></ul><ul><ul><ul><li>Big companies overlook small markets because they need big markets to satisfy their growth objectives </li></ul></ul></ul><ul><li>Uncertainty </li></ul><ul><ul><ul><li>Markets that don’t exist tough to analyze </li></ul></ul></ul>
  5. 5. Disruptive Technologies <ul><li>Initial under-performance … against mainstream market requirements </li></ul><ul><li>Improvement trajectory: competitive performance in the future </li></ul>
  6. 6. The ‘Dilemma Cycle’ <ul><li>Disruptive technology is often developed by established companies </li></ul><ul><li>Existing customers undervalue the changes which do not address their specific needs </li></ul><ul><li>Established players renew their focus on ‘sustaining’ technology development </li></ul><ul><li>New entrants intro the disruptive technology to small ‘fringe’ markets (attacker’s advantage) </li></ul><ul><li>Disruptive technology moves ‘upmarket’ </li></ul><ul><li>Established firms try to catch-up </li></ul>
  7. 7. Conclusions <ul><li>Technology development and absorption rates may differ widely </li></ul><ul><li>Sometimes, it’s difficult to match new technologies and existing markets </li></ul><ul><li>Organizational capabilities are generally more specialized and context-specific than managers are inclined to believe </li></ul><ul><li>The information required ‘to disrupt’ just doesn’t exist … so projects are very high risk </li></ul>

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