Incumbents focus on sustaining innovations, neglecting disruptive threats from "summary" of The Innovator's Dilemma by Clayton M. Christensen
Incumbents in established companies often become preoccupied with sustaining innovations that cater to their existing customers and improve their current products or services. This focus on incremental improvements is a natural response to the demands of the market and the expectations of shareholders. These sustaining innovations help companies maintain their competitive edge and solidify their position in the market.
However, this intense focus on sustaining innovations can blind incumbents to disruptive threats that may arise from seemingly inferior products or services entering the market. Disruptive innovations often target underserved or overlooked customer segments with simpler, more affordable solutions that may initially seem inferior to the existing offerings of established companies. These disruptive threats may not be perceived as a significant challenge at first, as they do not appeal to the mainstream customers that incumbents typically target with their sustaining innovations.
As a result, incumbents may dismiss or neglect these disruptive threats, believing that their current products and strategies are sufficient to address any competition that may arise. This complacency can be a fatal mistake, as disruptive innovations have the potential to gradually improve and gain traction in the market, eventually displacing the incumbents' offerings and disrupting their established business models.
The failure of incumbents to recognize and respond effectively to disruptive threats can lead to their downfall, as they find themselves unable to compete with the innovative and agile newcomers who have successfully captured the emerging market. This phenomenon, known as the innovator's dilemma, highlights the challenges that established companies face in balancing the need for sustaining innovations with the imperative to address disruptive threats.
In order to navigate this dilemma, incumbents must be willing to adapt and evolve their strategies to incorporate disruptive innovations that may initially seem insignificant or inferior. By proactively exploring and investing in emerging technologies and business models, incumbents can position themselves to successfully respond to disruptive threats and maintain their competitive edge in an ever-changing market landscape.
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