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The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail Hardcover – May 1, 1997

4.4 out of 5 stars 277 customer reviews

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Amazon.com Review

What do the Honda Supercub, Intel's 8088 processor, and hydraulic excavators have in common? They are all examples of disruptive technologies that helped to redefine the competitive landscape of their respective markets. These products did not come about as the result of successful companies carrying out sound business practices in established markets. In The Innovator's Dilemma, author Clayton M. Christensen shows how these and other products cut into the low end of the marketplace and eventually evolved to displace high-end competitors and their reigning technologies.

At the heart of The Innovator's Dilemma is how a successful company with established products keeps from being pushed aside by newer, cheaper products that will, over time, get better and become a serious threat. Christensen writes that even the best-managed companies, in spite of their attention to customers and continual investment in new technology, are susceptible to failure no matter what the industry, be it hard drives or consumer retailing. Succinct and clearly written, The Innovator's Dilemma is an important book that belongs on every manager's bookshelf. Highly recommended. --Harry C. Edwards

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The author, an associate professor at Harvard Business School, asks why some well-managed companies that stay on top of new technology and practice quality customer service can still falter. His own research brought a surprising answer to that question. Christensen suggests that by placing too great an emphasis on satisfying customers' current needs, companies fail to adapt or adopt new technology that will meet customers' unstated or future needs, and he argues that such companies will eventually fall behind. Christensen calls this phenomenon "disruptive technology" and demonstrates its effects in industries as diverse as the manufacture of hard-disk drives and mass retailing. He goes on to offer solutions by providing strategies for anticipating changes in markets. This book is another in the publisher's Management of Innovation and Change series. David Rouse

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Product Details

  • Hardcover: 256 pages
  • Publisher: Harvard Business Review Press; 1st edition (May 1, 1997)
  • Language: English
  • ISBN-10: 0875845851
  • ISBN-13: 978-0875845852
  • Product Dimensions: 9.6 x 6.4 x 1 inches
  • Shipping Weight: 1.3 pounds
  • Average Customer Review: 4.4 out of 5 stars  See all reviews (277 customer reviews)
  • Amazon Best Sellers Rank: #98,487 in Books (See Top 100 in Books)

Customer Reviews

Top Customer Reviews

Format: Hardcover
This is a book is about successful, well-led companies -often market leaders- that carefully pay attention to what customers need and that invest heavily in new technologies, but still loose their market leadership suddenly. This can happen when disruptive technologies enter the stage. Most technologies improve the performance of existing products in relation to the criteria which existing customers have always used. These technologies are called sustaining technologies. Disruptive technologies do something different. They create an entirely new value proposition. They improve the performance of the product in relation to new performance criteria. Products which are based on disruptive technologies are often smaller, cheaper, simpler, and easier to use. However, the moment they are introduced, they can not at once compete against the traditional products and so they cannot directly reach a big market. Christensen researched how disruptive technologies have developed in the computer disk industry, an extremely rapid evolving industry. He identified six steps in the emergence of disruptive technologies:
1. Disruptive technologies often are invented in traditional large companies. Example: at Seagate Technology, the biggest producer of 5,25 disks, engineers in 1985 designed the first 3,5 disk.
2. The marketing department examines first reactions from important customers to the new technology. Then they notice that existing customers are not very interested and they conclude that not a lot of money can be made with the new product. Example: this is what happened at Seagate. The 3,5 disk's were put upon the shelf.
3. The company keeps on investing in the traditional technology.
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Format: Hardcover Verified Purchase
Prior to reading this book, I chalked up the misfortunes of the well run companies of our time to the vagaries of the market place and put them in the same shoulder shrugging category of "bad things happen to good people." But now I have a new way of looking at success and failure due to disruptive technology. I better understand my own frustrations of trying to do new things in a large corporation given the further insight from Christensen that assets are really managed by customers, not our own managers. That is what makes this book scary. There seems little hope of any large corporation staying on top of disruptive technology unless they follow the prescription of segregating those innovations from the usual corporate overhead structure. That means spinning off groups, taking equity positions in start-up firms, and/or completely funding start-ups to grow the new markets. The writing is clear, the data gathered is thorough and fully documented with ample notes, the logic is concise, and the conclusions are entirely logical. Christensen gives us formulas for success including agnostic marketing to help us recognize emerging markets. The case studies are at once interesting and compelling. This is a must read for managers in any industry. Dr. Andrew S. Grove, Chairman and CEO of Intel Corporation had this to say, "This book addresses a tough problem that most successful companies will face eventually. It's lucid, analytical-and scary."
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Format: Paperback Verified Purchase
In The Innovator's dilemma, Clayton Christensen describes the dynamics by which some of the largest, most successful companies in America fail due to "good" management. In his analysis, firms that dedicate themselves to listening to and serving their customers the best, place themselves most at risk for future failures as they are overtaken by smaller upstart competitors with innovative technologies.
The Innovator's Dilemma makes a compelling argument based on the author's study of the computer disk drive industry. Disk drive manufacturing was chosen for its frequent turnover of technology and competitors in a relatively short timespan.
Cristensen places technological innovations in two categories: sustaining and disruptive. Sustaining innovations are those that help sustain an organization's existing customer base by improving the performance, capacity, reliability, or value of an existing product technology. Disruptive innovations produce products that are technologically inferior from the perspective of a firm's existing customer base. Disruptive products, however, may include improvements that, while unimportant to the existing market, hold potential for new and emerging markets. Christensen uses the example of the introduction of small 50cc Honda motorcycles in the late 1950's. From the perspective of the existing motorcycle market at the time, the Honda was inferior compared to larger, more powerful motorcycles such as Harley Davidson and BMW. Honda found a niche, however, as a dirt bike - an emerging market that had not been explored by other manufacturers but was ideally suited for a small, inexpensive motorcycle.
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Format: Hardcover
We have all seen large, powerful, and successful corporations upstaged and driven out of business by startups using new ideas to grow exponentially and dominate the new business landscape. In his book "The Innovator's Dilemma," Clayton M. Christensen provides a unique and novel theory that explains why entrenched corporations often fail to capitalize on such new ideas, and fall prey to firms with fewer initial resources. With enough data and case histories to make even the skeptic sit up and take notice, Christensen sculpts an argument that demands our attention at once. Step by step he shows that such extinctions come about not necessarily because of arrogance and dogmatism (though these play their parts) but because of the architectural and organizational structures that make good companies good. Like Einstein's theory of relativity, with its concepts of relative time and space, some of Christensen's conclusions seem unintuitive. Others even seem contrary to phy! sical reality. Sometimes it really is wrong to listen to your customers. Sometimes it is better to build a product with low margin and a limited market rather than build a product with high margin and large, virtually guaranteed market.
Christensen builds his thesis upon the notion that technology comes in two broad flavors: sustaining and disruptive. Established product lines use sustaining technology to make incremental improvements. In the language of biology, sustaining technology facilitates gradual Darwinian evolution where incremental improvements coupled with survival of the fittest lead to gradual product improvement. For example, tire manufacturers use sustaining technology to enhance the tread, sidewall, and belt design of automotive tires.
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