The_Innovators_Dilemma__Clayton

Source: Data are from the Historical Construction Equipment Association.
Hydraulics technology ultimately did progress to the point where it could address the needs of
mainstream excavation contractors. That progress was achieved, however, by the entrant companies,
who had first found a market for the initial capabilities of the technology, accumulated design and
manufacturing experience in that market, and then used that commercial platform to attack the value
networks above them. The established firms lost this contest. Only four cable excavator companies—
Insley, Koehring, Little Giant, and Link Belt—remained as viable suppliers to excavation contractors
by successfully but belatedly introducing lines of hydraulic excavators to defend their markets. 13
Aside from these, however, the other leading manufacturers of big cable machines in the mainstream
excavation markets never introduced a commercially successful hydraulic excavator. Although some
had employed hydraulics to a modest degree as a bucket-curling mechanism, they lacked the design
expertise and volume-based manufacturing cost position to compete as hydraulics invaded the
mainstream. By the early 1970s, all of these firms had been driven from the sewer, piping, and general
excavation markets by the entrants, most of which had refined their technological capabilities initially
in the small-contractor market. 14
This contrast in strategies for profiting from change characterizes the approaches employed by entrant
and established firms in many of the other industries affected by disruptive technologies—particularly
disk drives, steel, computers, and electric cars.
THE CHOICE BETWEEN CABLE AND HYDRAULICS
In the trajectory map of Figure 3.3, when hydraulics technology became capable of addressing the
bucket-size needs of sewer and piping contractors (and a similar trajectory could be sketched for armreach),
the competitive dynamics in the industry changed, and the mainstream excavation contractors
changed the criteria by which they purchased their equipment. Even today, the cable-actuated
architecture can attain much longer reach and greater lift than can hydraulic excavators: They have
roughly parallel technology trajectories. But once both cable- and hydraulics-actuated systems could
satisfy mainstream market requirements, excavation contractors could no longer base their choice of
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