The Innovators Dilemma

1
The Innovators Dilemma

• Aaron Mizrahi
• Vinny Dondero

what can cause smart people to make the wrong
decisions
2
Background

• A concept created by Clayton Christensen,
  Professor at Harvard Business School
• Christensen believes that well-run and
  established firms lose market share by not
  recognizing the difference between sustaining and
  disruptive technologies

3
Characteristics of Disruptive Technologies

• Less expensive to manufacture
• Simpler to use
• Smaller in size
• Performs better
• More reliable
• More convenient to use

4
Examples of Disruptive Technologies

• Internet Appliances
• Main competition with high-performance PCs
• Will become more widely used as high-speed
  Internet becomes more readily available
• Wireless Devices
• Main competition with landline communication
  devices
• Nurse Practitioners
• Main competition with medical doctors

5
Is a technology disruptive?

• Does a growth opportunity exist?
• Can it attract customers away from the mainstream
  market?
• Can the incumbent respond?

6
F.W. Woolworth Co.
7
F.W. Woolworth Co.

• F.W. Woolworth Co.
• Accepting a lower Gross Margin, with a higher
  rate of inventory turns increases the Return on
  Inventory Investment.

8
Wireless Phones
9
Wireless Phones

• Wireless Phones
• By 2003 there will be more wireless phone users
  that wireline telephones and PCs.

10
ConclusionQuestions?