The Innovator's Dilemma

Disruptive technologies bring to a market a very different value proposition than had been available previously. Generally, disruptive technologies underperform established products in mainstream markets. But they have other features that a few fringe (and generally new) customers value. Products based on disruptive technologies are typically cheap

What all sustaining technologies have In common is that they improve the performance of established products, along the dimensions of performance that mainstream customers in major markets have historically valued.

above, good management was the most powerful reason they failed to stay atop their industries. Precisely became these firms listened to their customers, invested aggressively in new technologies that would provide their customers more and better products of the sort they wanted, and because they carefully studied market trends and systematically al

disruptive technologies that may underperform today, relative to what users in the market demand, may be fully performance-competitive in that same market

The dilemmas posed to innovators by the conflicting demands of sustaining and disruptive technologies can be resolved. Managers must first understand what these intrinsic conflicts are. They then need to create a context in which each organization’s market position, economic structure, developmental capabilities, and values are sufficiently aligned

In reality, spinning out is an appropriate step only when confronting disruptive innovation. The evidence is very strong that large, mainstream organizations can be extremely creative in developing and implementing sustaining innovations.

If history is any guide, companies that keep disruptive technologies bottled up in their labs, working to improve them until they suit mainstream markets, will not be nearly as successful as firms that find markets that embrace the attributes of disruptive technologies as they initially stand.

If the acquiree’s processes and values were the reason for its historical success, a better strategy is to let the business stand alone, and for the parent to infuse its resources into the acquired firm’s processes and values. This strategy, in essence, truly constitutes the acquisition of new capabilities.

a process that defines a capability in executing a certain task concurrently defines disabilities in executing other tasks.