simpler than prior approaches. 8 They offered less of what customers in established markets wanted and so could rarely be initially employed there. They offered a different package of attributes valued only in emerging markets remote from, and unimportant to, the mainstream.

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.

As a result, these companies find it very difficult to invest adequate resources in disruptive technologies—lower-margin opportunities that their customers don’t want—until their customers want them. And by then it is too late.

best at this, that is, they have well-developed systems for killing ideas that their customers don’t want.

But these paradigms of sound management are useless—even counterproductive, in many instances—when dealing with disruptive technology.

The firms attacking from value networks below brought with them cost structures set to achieve profitability at lower gross margins. The attackers therefore were able to price their products profitably, while the defending, established firms experienced a severe price war.

7 In established firms, expected rewards, in their turn, drive the allocation of resources toward sustaining innovations and away from disruptive ones.

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

because it is in its processes and values that the organization’s most fundamental capabilities lie.