The_Innovators_Dilemma__Clayton

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13. “Can 3.5" Drives Displace 5.25s in Personal Computing?” Electronic Business, 1 August, 1986,81–84.14. Personal interview with Mr. William Schroeder, Vice Chairman, Conner Peripherals Corporation,November 19, 1991.15. An insightful study on the linkage among a company’s historical experience, its capabilities, andwhat it consequently can and cannot do, appears in Dorothy Leonard-Barton, “Core Capabilities andCore Rigidities: A Paradox in Managing New Product Development,” Strategic Management Journal(13), 1992, 111–125.16. Personal interview with Mr. John Squires, cofounder and Executive Vice President, ConnerPeripherals Corporation, April 27, 1992.17. See, for example, George Gilder, “The Revitalization of Everything: The Law of the Microcosm,”Harvard Business Review, March-April, 1988, 49–62.18. Much of this information about Allen Bradley has been taken from John Gurda, The BradleyLegacy (Milwaukee: The Lynde and Harry Bradley Foundation, 1992).116
CHAPTER SEVENDiscovering New andEmerging MarketsMarkets that do not exist cannot be analyzed: Suppliers and customers must discover them together.Not only are the market applications for disruptive technologies unknown at the time of theirdevelopment, they are unknowable. The strategies and plans that managers formulate for confrontingdisruptive technological change, therefore, should be plans for learning and discovery rather than plansfor execution. This is an important point to understand, because managers who believe they know amarket’s future will plan and invest very differently from those who recognize the uncertainties of adeveloping market.Most managers learn about innovation in a sustaining technology context because most technologiesdeveloped by established companies are sustaining in character. Such innovations are, by definition,targeted at known markets in which customer needs are understood. In this environment, a planned,researched approach to evaluating, developing, and marketing innovative products is not only possible,it is critical to success.What this means, however, is that much of what the best executives in successful companies havelearned about managing innovation is not relevant to disruptive technologies. Most marketers, forexample, have been schooled extensively, at universities and on the job, in the important art of listeningto their customers, but few have any theoretical or practical training in how to discover markets that donot yet exist. The problem with this lopsided experience base is that when the same analytical anddecision-making processes learned in the school of sustaining innovation are applied to enabling ordisruptive technologies, the effect on the company can be paralyzing. These processes demand crisplyquantified information when none exists, accurate estimates of financial returns when neither revenuesnor costs can be known, and management according to detailed plans and budgets that cannot beformulated. Applying inappropriate marketing, investment, and management processes can render goodcompanies incapable of creating the new markets in which enabling or disruptive technologies are firstused.In this chapter we shall see how experts in the disk drive industry were able to forecast the markets forsustaining technologies with stunning accuracy but had great difficulty in spotting the advent andpredicting the size of new markets for disruptive innovations. Additional case histories in themotorcycle and microprocessor industries further demonstrate the uncertainty about emerging marketapplications for disruptive or enabling technologies, even those that, in retrospect, appear obvious.FORECASTING MARKETS FOR SUSTAINING VERSUS DISRUPTIVE TECHNOLOGIESAn unusual amount of market information has been available about the disk drive industry from itsearliest days—a major reason why studying it has yielded such rich insights. The primary source of117
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Copyright © 1997 by the President
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In GratitudeAlthough this book list
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IntroductionThis book is about the
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There are two ways to resolve this
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Most new technologies foster improv
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Chapter 6 examines the emerging per
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To maintain their share prices and
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another—changes. When the perform
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published has been the number of pe
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HOW DISK DRIVES WORKDisk drives wri
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Some have attributed the high morta
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SUSTAINING TECHNOLOGICAL CHANGESIn
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The same pattern was apparent in th
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The trajectory map in Figure 1.7 sh
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with increased capacity at a lower
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commercially mature in its new appl
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entrant firms to topple the incumbe
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technology disk drives.11. This sta
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In assessing blame for the failure
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Source: Reprinted from Research Pol
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with its own value chain, 10 is ass
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Source: Data are from company annua
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Figures 2.5 and 2.6 illustrate clea
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analysts, therefore, joined their m
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engineering workstation, and mainfr
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procure the component flash chips;
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Figure 2.8 Comparison of Disk Drive
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in commercializing such technologie
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products can be interactively devel
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Source: Osgood General photo in Her
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mechanical excavators by their reac
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sets built with vacuum tubes) to vo
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We need a strong motivation to acce
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16. This list of smaller, simpler,
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Third, just as there is a resource
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The Innovator’s DilemmaBook Group
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lead to success with sustaining tec
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recognizing that different technolo
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