Established companies focus on current customer needs from "summary" of The Innovator's Dilemma by Clayton M. Christensen
Established companies are driven to satisfy the needs of their existing customers. This is a natural inclination, as these customers are the source of their current revenue and profitability. By focusing on current customer needs, these companies are able to maintain customer satisfaction and loyalty, which in turn helps to sustain their business operations.
The problem, however, lies in the fact that established companies tend to overlook the needs of potential future customers. These customers may have different requirements or preferences that are not being addressed by the company's current offerings. This oversight can be detrimental in the long run, as it leaves the company vulnerable to disruptive innovations that cater to these unmet needs.
Disruptive innovations often emerge from smaller, more agile competitors who are able to identify and target niche markets that are underserved by established companies. These innovators are not burdened by the same constraints and commitments that established companies face, allowing them to experiment with new ideas and approaches that may not initially seem profitable or worthwhile.
As disruptive innovations gain traction in the market, they start to erode the customer base of established companies. This can be a gradual process, as the new offerings may initially appeal to only a small segment of customers. However, over time, these innovations can improve and expand their capabilities, eventually capturing a larger share of the market.
The dilemma for established companies, then, is how to balance the needs of their current customers with the need to innovate for the future. This requires a shift in mindset, from solely focusing on short-term gains to also considering long-term strategic goals. By proactively seeking out and addressing the needs of potential future customers, established companies can better position themselves to adapt and thrive in an increasingly competitive and dynamic business environment.
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