toward sustaining innovations and away from disruptive ones. This pattern of resource allocationaccounts for established firms’ consistent leadership in the former and their dismal performance in thelatter.Value Networks Mirror Product ArchitectureCompanies are embedded in value networks because their products generally are embedded, or nestedhierarchically, as components within other products and eventually within end systems of use. 8Consider a 1980s-vintage management information system (MIS) for a large organization, as illustratedin Figure 2.1. The architecture of the MIS ties together various components—a mainframe computer;peripherals such as line printers and tape and disk drives; software; a large, air-conditioned room withcables running under a raised floor; and so on. At the next level, the mainframe computer is itself anarchitected system, comprising such components as a central processing unit, multi-chip packages andcircuit boards, RAM circuits, terminals, controllers, and disk drives. Telescoping down still further, thedisk drive is a system whose components include a motor, actuator, spindle, disks, heads, andcontroller. In turn, the disk itself can be analyzed as a system composed of an aluminum platter,magnetic material, adhesives, abrasives, lubricants, and coatings.Although the goods and services constituting such a system of use may all be produced within a single,extensively integrated corporation such as AT&T or IBM, most are tradable, especially in more maturemarkets. This means that, while Figure 2.1 is drawn to describe the nested physical architecture of aproduct system, it also implies the existence of a nested network of producers and markets throughwhich the components at each level are made and sold to integrators at the next higher level in thesystem. Firms that design and assemble disk drives, for example, such as Quantum and Maxtor,procure read-write heads from firms specializing in the manufacture of those heads, and they buy disksfrom other firms and spin motors, actuator motors, and integrated circuitry from still others. At the nexthigher level, firms that design and assemble computers may buy their integrated circuits, terminals,disk drives, IC packaging, and power supplies from various firms that manufacture those particularproducts. This nested commercial system is a value network.Figure 2.1 A Nested, or Telescoping, System of Product Architecture40
Source: Reprinted from Research Policy 24, Clayton M. Chistensen and Richard S. Rosenbloom,“Explaining the Attacker's Advantage: Technological Paradigms, Organizational Dynamics, and theValue Network,” 233–257, 1995 with kind permission of Elsevier Science—NL, Sara Burgerhartstraat25, 1055 KV Amsterdam, The Netherlands.Figure 2.2 illustrates three value networks for computing applications: Reading top to bottom they arethe value network for a corporate MIS system-of-use, for portable personal computing products, andfor computer-automated design (CAD). Drawn only to convey the concept of how networks arebounded and may differ from each other, these depictions are not meant to represent completestructures.Metrics of ValueThe way value is measured differs across networks. 9 In fact, the unique rank-ordering of theimportance of various product performance attributes defines, in part, the boundaries of a valuenetwork. Examples in Figure 2.2, listed to the right of the center column of component boxes, show41
- Page 1 and 2: 1
- Page 3 and 4: Copyright © 1997 by the President
- Page 5 and 6: In GratitudeAlthough this book list
- Page 7 and 8: IntroductionThis book is about the
- Page 9 and 10: There are two ways to resolve this
- Page 11 and 12: Most new technologies foster improv
- Page 13 and 14: Chapter 6 examines the emerging per
- Page 15 and 16: To maintain their share prices and
- Page 17 and 18: another—changes. When the perform
- Page 19 and 20: published has been the number of pe
- Page 21 and 22: HOW DISK DRIVES WORKDisk drives wri
- Page 23 and 24: Some have attributed the high morta
- Page 25 and 26: SUSTAINING TECHNOLOGICAL CHANGESIn
- Page 27 and 28: The same pattern was apparent in th
- Page 29 and 30: The trajectory map in Figure 1.7 sh
- Page 31 and 32: with increased capacity at a lower
- Page 33 and 34: commercially mature in its new appl
- Page 35 and 36: entrant firms to topple the incumbe
- Page 37 and 38: technology disk drives.11. This sta
- Page 39: In assessing blame for the failure
- Page 43 and 44: with its own value chain, 10 is ass
- Page 45 and 46: Source: Data are from company annua
- Page 47 and 48: Figures 2.5 and 2.6 illustrate clea
- Page 49 and 50: analysts, therefore, joined their m
- Page 51 and 52: engineering workstation, and mainfr
- Page 53 and 54: procure the component flash chips;
- Page 55 and 56: Figure 2.8 Comparison of Disk Drive
- Page 57 and 58: in commercializing such technologie
- Page 59 and 60: products can be interactively devel
- Page 61 and 62: Source: Osgood General photo in Her
- Page 63 and 64: mechanical excavators by their reac
- Page 65 and 66: Source: Brochure from Sherman Produ
- Page 67 and 68: Bucyrus Erie was the only maker of
- Page 69 and 70: equipment on which had longer reach
- Page 71 and 72: 11. Makers of early hybrid ocean tr
- Page 73 and 74: Source: Data are from various issue
- Page 75 and 76: Source: Data are from various issue
- Page 77 and 78: Compare that conversation to the ma
- Page 79 and 80: employees, there was nothing about
- Page 81 and 82: more than 93,000 in 1980 to fewer t
- Page 83 and 84: Another analyst made similar observ
- Page 85 and 86: 1970).3. The use of the term system
- Page 87 and 88: Part Two of this book is built upon
- Page 89 and 90: CHAPTER FIVEGive Responsibility for
- Page 91 and 92:
career trajectories within the comp
- Page 93 and 94:
its major customers and replace the
- Page 95 and 96:
DEC didn’t stumble for lack of tr
- Page 97 and 98:
Figure 5.2 Gains in Discount Retail
- Page 99 and 100:
Woolworth’s organizational strate
- Page 101 and 102:
(2), 1991, 239-262, as essentially
- Page 103 and 104:
fifteen year expense of developing
- Page 105 and 106:
Source: Clayton M. Christensen, “
- Page 107 and 108:
was a start-up or a diversified fir
- Page 109 and 110:
A decade after the release of the A
- Page 111 and 112:
offering. By 1991, however, even th
- Page 113 and 114:
General Electric and Westinghouse h
- Page 115 and 116:
the competition were able to prospe
- Page 117 and 118:
CHAPTER SEVENDiscovering New andEme
- Page 119 and 120:
new architectures for which Disk/Tr
- Page 121 and 122:
to 2.5- and 1.8-inch drives. Only i
- Page 123 and 124:
advertising campaign. These serendi
- Page 125 and 126:
disruptive technologies are unpredi
- Page 127 and 128:
before making commitments that were
- Page 129 and 130:
CHAPTER EIGHTHow to Appraise YourOr
- Page 131 and 132:
meant not to change—or if they mu
- Page 133 and 134:
the companies that had led in the o
- Page 135 and 136:
reside in processes and values and
- Page 137 and 138:
for its historical success, a bette
- Page 139 and 140:
company would experimentally and in
- Page 141 and 142:
integrate components more effective
- Page 143 and 144:
research is being built.5. See Wick
- Page 145 and 146:
drives. By 1989, the measure was 1.
- Page 147 and 148:
dimension satisfied market needs, t
- Page 149 and 150:
Consider, for example, the product
- Page 151 and 152:
When performance oversupply has occ
- Page 153 and 154:
Meanwhile, Novo, a much smaller Dan
- Page 155 and 156:
propositions centered on convenienc
- Page 157 and 158:
supply. Understanding these traject
- Page 159 and 160:
CHAPTER TENManaging DisruptiveTechn
- Page 161 and 162:
Figure 10.1 The Electric CarSource:
- Page 163 and 164:
nothing first-time bet, as Apple di
- Page 165 and 166:
models, such as Camry, Previa, and
- Page 167 and 168:
sets built with vacuum tubes) to vo
- Page 169 and 170:
We need a strong motivation to acce
- Page 171 and 172:
16. This list of smaller, simpler,
- Page 173 and 174:
Third, just as there is a resource
- Page 175 and 176:
The Innovator’s DilemmaBook Group
- Page 177 and 178:
lead to success with sustaining tec
- Page 179:
recognizing that different technolo