The_Innovators_Dilemma__Clayton

propositions centered on convenience of purchase and use. In the face of this, Compaq responded by
actively pursuing this second approach, aggressively fighting any upmarket drift by producing a line of
computers with low prices and modest functionality targeted to the needs of the lower tiers of the
market.
The third strategic option for dealing with these dynamics is to use marketing initiatives to steepen the
slopes of the market trajectories so that customers demand the performance improvements that the
technologists provide. Since a necessary condition for the playing out of these dynamics is that the
slope of the technology trajectory be steeper than the market’s trajectory, when the two slopes are
parallel, performance oversupply—and the progression from one stage of the product life cycle to the
next—does not occur or is at least postponed.
Some computer industry observers believe that Microsoft, Intel, and the disk drive companies have
pursued this last strategy very effectively. Microsoft has used its industry dominance to create and
successfully market software packages that consume massive amounts of disk memory and require
ever-faster microprocessors to execute. It has, essentially, increased the slopes of the trajectories of
improvement in functionality demanded by their customers to parallel the slope of improvement
provided by their technologists. The effect of this strategy is described in Figure 9.5, depicting recent
events in the disk drive industry. (This chart updates through 1996 the disk drive trajectory map in
Figure 1.7.) Notice how the trajectories of capacity demanded in the mid-range, desktop, and notebook
computer segments kinked upward in the 1990s along a path that essentially paralleled the capacity
path blazed by the makers of 3.5-inch and 2.5-inch disk drives. Because of this, these markets have not
experienced performance oversupply in recent years. The 2.5-inch drive remains locked within the
notebook computer market because capacity demanded on the desktop is increasing at too brisk a pace.
The 3.5-inch drive remains solidly ensconced in the desktop market, and the 1.8-inch drive has
penetrated few notebook computers, for the same reasons. In this situation, the companies whose
products are positioned closest to the top of the market, such as Seagate and IBM, have been the most
profitable, because in the absence of technology oversupply, a shift in the stages of the product life
cycle at the high end of the market has been held at bay.
Figure 9.5 Changed Performance Demand Trajectories and the Deferred Impact of Disruptive
Technologies
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