1997 TheInnovatorsDilemmaWhenNewTech
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- (Christensen, 1997) ⇒ Clayton M. Christensen. (1997). “The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail.” Harvard Business Review Press.
Subject Headings: Disruptive Innovation, Disruptive Technology, Incumbent Company.
Notes
- Disruptive Innovation: Christensen introduces the concept of disruptive innovation, where small companies with inferior but evolving technologies eventually displace established firms by targeting overlooked customer segments.
- Incumbent’s Dilemma: Successful companies face a dilemma when deciding whether to focus on high-end customers with sustaining innovations or risk cannibalizing their own products by investing in unproven, disruptive technologies.
- Market Entrants vs. Incumbents: The book demonstrates how newcomers often win by focusing on niche markets incumbents dismiss as unimportant. Over time, these entrants refine their offerings until they can compete with mainstream products.
- Misalignment of Resources: Large companies allocate resources to areas that deliver the highest immediate returns, neglecting emerging opportunities. This misalignment makes it difficult for them to respond effectively to disruptive innovations.
- Value Networks: A key theme is how established companies are constrained by existing value networks—the suppliers, customers, and partners they rely on—making it difficult to pursue innovations that do not fit within these networks.
- Organizational Inertia: The book highlights the challenges companies face due to internal resistance and rigid structures, which prevent them from experimenting with new business models and smaller, low-margin innovations.
- Strategic Responses to Disruption: Christensen outlines strategies for incumbents to address the disruptive innovation threat, including creating autonomous units, developing disruptive technologies, and focusing on long-term gains over short-term profitability.
Cited By
Quotes
2022
- (Wikipedia, 2022) ⇒ https://en.wikipedia.org/wiki/The_Innovator's_Dilemma Retrieved:2022-3-8.
- The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail, first published in 1997, is the best-known work of the Harvard professor and businessman Clayton Christensen. It expands on the concept of disruptive technologies, a term he coined in a 1995 article Disruptive Technologies: Catching the Wave. [1] It describes how large incumbent companies lose market share by listening to their customers and providing what appears to be the highest-value products, but new companies that serve low-value customers with poorly developed technology can improve that technology incrementally until it is good enough to quickly and take market share from established business. Christensen recommends that large companies maintain small, nimble divisions that attempt to replicate this phenomenon internally to avoid being blindsided and overtaken by startup competitors.
- ↑ Bower, Joseph L. & Christensen, Clayton M. (1995). However the concept of new technologies leading to wholesale economic change is not a new idea since Joseph Schumpeter adapted the idea of creative destruction from Karl Marx. Schumpeter (1949) in one of his examples used "the railroadization of the Middle West as it was initiated by the Illinois Central". He wrote, "The Illinois Central not only meant very good business whilst it was built and whilst new cities were built around it and land was cultivated, but it spelled the death sentence for the [old] agriculture of the West."Disruptive Technologies: Catching the Wave" Harvard Business Review, January–February 1995
Book Overview
- https://www.hbs.edu/faculty/Pages/item.aspx?num=46
- QUOTE: In this revolutionary bestseller, innovation expert Clayton M. Christensen says outstanding companies can do everything right and still lose their market leadership—or worse, disappear altogether. And not only does he prove what he says, but he tells others how to avoid a similar fate.
Focusing on “disruptive technology,” Christensen shows why most companies miss out on new waves of innovation. Whether in electronics or retailing, a successful company with established products will get pushed aside unless managers know when to abandon traditional business practices. Using the lessons of successes and failures from leading companies, The Innovator’s Dilemma presents a set of rules for capitalizing on the phenomenon of disruptive innovation.
Find out:
- When it is right not to listen to customers.
- When to invest in developing lower-performance products that promise lower margins.
- When to pursue small markets at the expense of seemingly larger and more lucrative ones.
References
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| Author | volume | Date Value | title | type | journal | titleUrl | doi | note | year | |
|---|---|---|---|---|---|---|---|---|---|---|
| 1997 TheInnovatorsDilemmaWhenNewTech | Clayton M. Christensen | The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail | 1997 |