The Innovator's Dilemma: The Revolutionary Book that Will Change the Way You Do Business (Collins Business Essentials)

Innovation takes two forms: sustaining and disruptive. Competition in oligopolistic markets is manifest in continuous product improvement, or sustaining innovation. This contrasts with a disruptive innovation, which fundamentally changes a product's nature, offering new functionality, although often at the expense of performance.

Typically, when disruptive innovation occurs, incumbents will reject the new technology; where markets do exist for such innovative products, they tend to be small and offer slim margins. Despite this, the book cites evidence of upstart firms with a low cost configuration and lower profit expectations, which have successfully exploited these marginal opportunities.

Refinement of the innovative product to a standard acceptable to traditional customers coupled with additional functionality enables the niche player to compete head on with established firms. They do so by pricing aggressively. Market incumbents typically respond by quickly incorporating the innovative technology into their products, only to find that they are able to make little impact in the developing new market (weak brand name) and cannibalise their existing customer base at lower margins. A new technology standard has been set.

The few firms that have survived a disruptive innovation have embraced the new technology early and recognised the need for a different approach to operation within the market. This demands a different corporate mentality and ultimately, organisational design, which is only possible by establishing a virtually autonomous and sometimes geographically separate subsidiary. Eventually, this may reverse acquire the parent.

The Innovator's Dilemma provides an interesting perspective on a seemingly recurrent problem. It does so in a fashion that is both insightful and easy to read. The main themes in the book are qualified with numerous examples and some rudimentary analysis, whilst avoiding being unduly repetitive.


Give you the real solution to utilize disruptive technology   March 21, 1998
If you only read one chapter, just read the last chapter on the case of electrical car. Then you can handle the main idea of the book immediately.


An excellent contribution to thought on innovation strategy   October 11, 1997
I loved this book because it challenges conventional management cliches about "customer focus". Christensen clearly outlines how customer focus becomes a trap when a firm is faced with a "disruptive technology". The book offers both theory and practical advice and does both well; a rare feat. I found this book directly relevant to my own organization's innovation strategy. A superb piece of work.


Excellent analysis of growing industries and opportunities   August 20, 1997
This book provides an insightful analysis of growth opportunities provided by technological breakthroughs. It allows the reader to understand how the capacities that led firms to success may also lead to eventual failure. In addition, it explains why firms often fail to pursue new technologies that do not serve their immediate customer base and how that inaction may result in their demise. The book is lucidly written and provides ample examples to support the hypothesis. It is one of the few business books today that provides new insight into exploiting technological innovation.