The definitive answer to "Why is Nikon failing?": the Innovator's Dilemma

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Burnt to a Crisp Regular Member • Posts: 422
The definitive answer to "Why is Nikon failing?": the Innovator's Dilemma
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Credit to OpticsEngineer for referencing this in another post.

In his book, The Innovator's Dilemma, Professor Clayton Christensen of Harvard Business School describes a theory about how large, outstanding firms can fail "by doing everything right." The Innovator's Dilemma, according to Christensen, describes companies whose successes and capabilities can actually become obstacles in the face of changing markets and technologies.

Christensen describes two types of technologies: sustaining technologies and disruptive technologies. Sustaining technologies are technologies that improve product performance. These are technologies that most large companies are familiar with; technologies that involve improving a product that has an established role in the market. Most large companies are adept at turning sustaining technology challenges into achievements.

Yet, large companies have problems dealing with disruptive technologies. Disruptive technologies are "innovations that result in worse product performance, at least in the near term." They are generally "cheaper, simpler, smaller, and, frequently, more convenient to use." Disruptive technologies occur less frequently, but when they do, they can cause the failure of highly successful companies who are only prepared for sustaining technologies.

Disruptive technologies cause problems because they do not initially satisfy the demands of even the high end of the market. Because of that, large companies choose to overlook disruptive technologies until they become more attractive profit-wise. Disruptive technologies, however, eventually surpass sustaining technologies in satisfying market demand with lower costs. When this happens, large companies who did not invest in the disruptive technology sooner are left behind. This, according to Christensen, is the "Innovator's Dilemma."

We all know what the MAJOR DISRUPTOR is--THE SMARTPHONE.

Is the OUTCOME written on the wall? You be the judge!

Source:http://web.mit.edu/6.933/www/Fall2000/teradyne/clay.html

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