A friend recommended this book to me a few months back. I read it then but after the recent discussion about Dell, Acer and the netbook market decided to read it again. I also posted a review on Amazon.
The Innovator's Dilemma is a unique approach to understanding corporate failure. Christiansen's thesis is that well managed companies with all the best processes in place do fail. The failure is not due to inefficiency, bad management or bad processes but due to companies being responsible in terms of listening to their customers, investing in technologies that their customers' demand and rationally allocating resources to high-margin products. Christiansen argues that these investments are made on sustaining technologies as opposed to disruptive technologies. He reason's established sector leaders do this because the initial market for disruptive technologies is too small to justify the investment and sustain corporate growth. This provides new entrants with time and space to establish themselves in the emerging market and that when the performance of the disruptive technology intersects the needs placed on the traditional technologies in an industry, these disruptive technologies will start to take over from the traditional sector leaders. [Read Full Review]
I feel this book speaks directly to what is happening in the netbook market. Once again, this is not a prediction of the demise of Dell but netbooks are changing the way people percieve and view computers. The growth of this sector has obviously grown due to the economic crisis due to the low price of these devices but I still cannot help feeling that by not investing in these products, they are missing something. I may be wrong but this book (even the introduction) is a mirror of the current situation in this market and also surprisingly the rise of ARM processors.
So anyway rather than reading the review read the book and let me know what you think. It will be interesting.
2 comments:
I'm not sure that I will make reading the book, but certainly the business review article should be easy enough to digest. I think I have a basic grasp of the "dilemma", but I'm curious if Christiansen has any prescriptions. Many large, traditional companies have tried the incubator/startup/buy startup route. Oracle and Cisco seem to buy up anything that looks even slightly like a threat and they invest a lot in new companies as well. Intel does as well, but I believe that is more motivated by trying to create new markets for their core competence rather than attempting to buy up upstart competitors with "disruptive technology" (I may be wrong). Once you accept that you have a problem: 1) What can be done to avoid the dilemma? 2) What are successful cases and strategies for avoiding these kinds of situations?
To my knowledge, I don't commonly hear of Taiwanese high tech companies buying up startups, but I do once in awhile hear about investments in startups.
This review of the audio version of the book was pretty funny and ironic: Content good, CD composition misses the concep
I'm wondering if Asus planned and thought of the Netbook as disruptive to the PC industry. Or if it was just the fortunate result after another attempt to reduce the cost of their laptops.
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