Innovator’s Dilemma: The Revolutionary Book That Will Change The Way You Do Business

ETM 5163

Business Innovation & Technology

Deliverables:

A Summary Paper for the book “Innovator’s Dilemma: The Revolutionary Book That Will Change the Way You Do Business.”

Answer the following questions:

How is company failure and managing disruptive technological change related?

The disk drive industry was a fast paced lesson in disruptive technology.  The pattern started when the disk drive became a sustaining technology and established companies capitalized on it.  Often a next generation drive that was smaller than its predecessor was developed. With the market firmly engaged in the sustaining technology the new drive typically failed to find its footing.  This would cause larger, developed companies to shelve this “next generation” technology for lack of a market for it (Christensen, 1997, p. 20).  Often times start-ups that may be developing smaller drives in parallel succeeded in finding smaller markets to sell to.  The smaller sales generated was enough to give the start-up the success they needed to grow and evolve their drive until it was firmly implanted in the market.  By that point it had often become competitive enough to take appreciable market share from the older disk-drive that was sustained that it pushed the drive out of the market and caused the established companies to falter (Christensen, 1997, p. 25).  The failure of established companies to manage this disruptive technology often led to their own failure.  They let the disruptive technology develop into a sustaining technology and eventually claim their market share until they were no longer profitable .

The book talks about three particular industries that failed. Explain “from the book’s perspective” why these industries failed. What were the “most important” circumstances that caused failure

Christensen describes a pattern as followed by successful companies incorrectly handling disruptive technology.  The first was developing disruptive technologies within established firms.  This gave the disruptive technology late entry into the market due to internal engineering not making it priority with its low market expectations.  Second, marketing personnel would use their current customer looking for feedback.  This often times was unsuccessful due to the fact the disruptive technology was looking for a new customer base.  Third, developed companies would end up stepping up the pace of sustaining technology and shelving the disruptive technology due to lack of market.  Fourth, a lack of effort by the successful companies opened the door to new emerging companies to pursue a market for the disruptive technology.  Fifth, successful companies ignored the new downmarket developed by the new companies due to its unattractive market size.  Sixth, established companies entered the new market when it finally invaded their established market.  This was typically too late as the new technology was now sustaining (Christensen, 1997, p. 53).