Innovator's Dilemma

date Sep 30, 2010
authors Clayton Christensen
reading time 1 min
  • Book Title: The Innovator’s Dilemma
  • Author: Clayton Christensen
  • Year written/published: 1997
  • Some extracts:

Harnessing the principles of disruptive innovation:

  1. Companies depend on customers and investors for resources
  2. Small markets don’t solve the growth needs of large companies
  3. markets that don’t exist can’t be analyses
  4. An organisation’s capabilities define its disabilities
  5. Technology supply may not equal market demand


The fear of cannibalizing sales of existing products is often cited as a reason why established firms delay the introduction of new technologies. … But when established firm wait until a new technology has become commercially mature in its new applications and launch their own version of the technology only in response to an attack on their home markets, the fear of cannibalization can become a self-fulfilling prophecy.

Successful companies…

Successful companies want their resources to be focused on activities that address customer’s needs, that promise higher profits that are technologically feasible, and that help them play in substantial markets. Yet, to expect the processes that accomplish these things also to do something like nurturing disruptive technologies 0 to focus resources on proposals that customers reject, that offer lower profit, that underperform existing technologies and can only be sold in insignificant markets …

Bigger companies….

… creating new markets is significantly less risky and more rewarding than entering established markets against entrenched competition. But as companies become larger and more successful, it becomes more difficult to enter emerging markets early enough. Because growing companies need to add increasingly large chunks of new revenue each year just to maintain their desired rate of growth, it becomes less and less possible that small markets can be viable as vehicles through which to find these chunks of revenue.

Well managed companies…

… are excellent at developing the sustaining technologies that improve the performance of their products in the ways that matter to their customers. This is because their management practices are biased toward:

  1. Listening to customers
  2. Investing aggressively in technologies that give those customers what they say they want
  3. Seeking higher margins
  4. Targeting larger markets rather than smaller ones