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D8 Cchristensen PDF
D8 Cchristensen PDF
Clayton M. Christensen
Harvard Business School
• Historically, less than 10% of companies have been able to sustain for
more than a few years the growth that creates above-average
shareholder returns.
• Once a company’s growth has stalled, the probability that it can
successfully re-accelerate growth is only 6%.
og
Pr
tions
a
innov
aining
t
Sus
o rm a n c e th a t customers
Perf
sorb
can utilize or ab
Disruptive
Entrants nearly always win
technologies
Time
tio ns 60% on
nova
Performance
in e rs $500,000
in g ut
ustain icomp
S in
to m
45% on
$250,000
40% 20%
Disruptive on $2,000
technology:
personal
computers
Time
Performance
into an established
market
ption
Different measure
Of Performance
is ru
w-end d r -served ost
L o v e - c
ddress o h a lower
A s wit model
m er
custo business
Time
:
isruption -
d n
-market ainst noon
New pete ag sumpti
or Com con
ers
um ing Time
ons sum
c n
on - -co ns
N on sio
N ca
oc
© Copyright 2003 Clayton M. Christensen.
Disruptive Innovation and Creating New Market Growth | 8
Major Established
Electronics Markets:
Tabletop radios, floor-standing
televisions, computers,
telecomm.equipment, etc.
Performance
Portable TVs
Pocket radios
Path taken by
Hearing Aids established
vacuum tube
manufacturers
Time
Word Processing
Wireline e-mail
Performance
Wireless e-mail
Chat rooms
Standard phrases
Path taken
Toy robots by IBM
Time
Segmentation
Organizational based upon
structure,
performance
U attributes of
products
measurement
systems, channel
structure
Job-based
Nascent
segmentation:
idea What are
customers trying to
get done in their
lives?
U
Focus on customer rather
than job as the unit of
analysis; demands for Segmentation based
quantification; economics upon attributes of
of communication customers
© Copyright 2003 Clayton M. Christensen.
Disruptive Innovation and Creating New Market Growth | 11
Facilitate priorities
Digital cameras
Electronic learning
Structuring the market in terms defined by data that are easily collected
obfuscates the right targets for innovation.
• Phone • Voice
Integrated firms have the advantage when products aren’t good enough.
Focused firms overtake over-served markets.
Beat competitors
with functionality
Performance
tures
hitec
t Arc
n
nde
epe res
erd tu
Int itec
Arch
lar Beat competitors
du
Mo with speed, responsiveness
and customization
Time
Digital Equipment
Control Data
% of tons
25–30%
Steel Quality
55%
Sheet steel
18% 22%
l
Structural Stee
l
stee 8%
uced iron; bars & rods
prod 12% Angle
l -
mil 4%
ni Rebar
f mi
lityo 7%
ua
Q
Retail/
distribution that
Retailing is
addresses speed
undifferentiable and convenience
is attractive
$
$ Performance Functionality
Design & Design &
assembly of assembly of
proprietary modular
products is systems is
highly profitable. Speed & responsiveness commoditized.
$ Time
$
Performance-
Components are
defining
undifferentiable
subsystems are
commodities very profitable
• Computers
• Xerography
• Angioplasty
Complex
Experimentation
& problem-solving
Pattern Recognition
Rules-Based
Simple
Tertiary
Ambiguous
Deep
hospital
Scientific understanding,
an unstructured, experimental
Outpatient problem-solving process, towards
Clinic a rules-based regime.
Office
Simple
Little
Family
Sick child Parent Nurse Specialist
doctor
© Copyright 2003 Clayton M. Christensen.
Disruptive Innovation and Creating New Market Growth | 20
Intended Im
strategy wh prove
at w d u
ork nde
s an rsta
d w ndin
hat g
doe of
sn’
t
Strategic Actions:
The Resource Actual
New products,
Organization’s
allocation
process services, Strategy
values processes,
acquisitions
unities
rt
o ppo cesses
cipated d suc
nti s an
Emergent Una blem
strategy pro
12,000
J&J
Annual Professional
10,000 Division
Sales
($ millions)
8,000
6,000
Consumer
Division
4,000
2,000
0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
CAGR
12,000
Annual
10.3%
Sales 10,000
Total
($ millions)
8,000
Normalized*(1)
3.7%
6,000 2.9% Absolute*
40.9% New Disruptive Growth
Businesses*
4,000
2,000
0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
*Adjusted for revenues from Cordis, Ethicon Endo Surgery, LifeScan and Vistakon
Complex
p itals
Hos
e ral
Complexity Ge
n ilities
of diagnosis t F ac
at ien
and
ut -p are
treatment O c
ffice
o
In -
e
e car
- hom
In
Simple
icians
Complex s
phy
list
cia
b - spe
t & su
ecialis sicians Performance
Sp
re phy that the
n al ca marketplace
Complexity
/ p erso needs or
of diagnosis am ily
F utilizes
and ers
io n
treatment
p ractit
e
Nurs
lf - care
Se
Simple
Time