The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail (Management of Innovation and Change)

By approaching a disruptive business with the mindset that they can’t know where the market is, managers would identify what critical information about new markets is most necessary and in what sequence that information is needed.

the leaders in this industry did not fail because they became passive, arrogant, or risk-averse or because they couldn’t keep up with the stunning rate of technological change.

The basis of product choice often evolves from functionality to reliability, then to convenience, and, ultimately, to price.

We first sell the drives; then we design them; and then we build them.

Honda’s executives were eager to exploit the company’s low labor costs to export motorbikes to North America,

It is this upward mobility that makes disruptive technologies so dangerous to established firms—and so attractive to entrants.

The properties of its products varied according to the metallurgical composition and impurities of the scrap. Hence, about the only market that minimill producers could address was that for steel reinforcing bars (rebars)—right at the bottom of the market in terms of quality, cost, and margins.

For these reasons, makers of mainframe computers, and makers of the 14-inch disk drives sold to them, historically needed gross profit margins of between 50 percent and 60 percent to cover the overhead cost structure inherent to the value network in which they competed.

In retrospect, these were obvious markets for hard drives, but at the time, their ultimate size and significance were highly uncertain.