Author: Clayton Christensen Rating: 3
Why do well established companies fail to innovate in a disruptive technologies market ? Disruptive technology is defined as something which currently has no market demand or utility. There are disk manufactures, earth movers etc examples discussed in the book to illustrate the reasons. It is not that the established companies do not have talent, skill or resources. In fact, they have it in abundance. The fact is that the resources are allocated to the products where there is positive return on investment. Customer focus is another reason for lagging behind in such markets. There is no demand for such products and the utility does not justify the cost. The disruptive technologies are generally cheaper, but the cost per one unit of utility is higher. Company hierarchy is another hindrance. Companies are structured in such a way that these new ideas are seldom discussed as they are not profitable.
Second half of the book deals with how the big companies could make a dent in the disruptive markets. The author suggests that they should make a separate company with majority share holdings with the parent company. The spin out should have the full autonomy to design and market products for the emerging markets without causing a drain on the major profitable market.
Although the book is informative, I found the book repetitive. I also did not think that the topic or the reasons for failure of the big companies were any different from what we might already know.
