1) Disruptive technologies are often initially developed by established companies but are undervalued by their existing customers as they do not address current needs. 2) These established players focus on sustaining their current technology while new entrants introduce disruptive technologies to small fringe markets. 3) The disruptive technology then moves upmarket and the established firms, who ignored it initially, must now try to catch up.

1. Innovator’s Dilemma - Introduction Clayton M Christensen, HBS Press, 1997

2. Innovator’s Dilemma - Introduction Clayton M Christensen, HBS Press, 1997 Disruptive technology is often developed by established companies Existing customers undervalue the changes which do not address their specific needs Established players renew their focus on ‘sustaining’ technology development New entrants intro the disruptive technology to small ‘fringe’ markets (attacker’s advantage) Disruptive technology moves ‘upmarket’ Established firms try to catch-up

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. Principles Dependency Companies do not have ‘free reign’ because they depend on customers and investors for resources Size Big companies overlook small markets because they need big markets to satisfy their growth objectives Uncertainty Markets that don’t exist tough to analyze

5. Disruptive Technologies Initial under-performance … against mainstream market requirements Improvement trajectory: competitive performance in the future

6. The ‘Dilemma Cycle’ Disruptive technology is often developed by established companies Existing customers undervalue the changes which do not address their specific needs Established players renew their focus on ‘sustaining’ technology development New entrants intro the disruptive technology to small ‘fringe’ markets (attacker’s advantage) Disruptive technology moves ‘upmarket’ Established firms try to catch-up

7. Conclusions Technology development and absorption rates may differ widely Sometimes, it’s difficult to match new technologies and existing markets Organizational capabilities are generally more specialized and context-specific than managers are inclined to believe The information required ‘to disrupt’ just doesn’t exist … so projects are very high risk