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Concentrated Knowledge™ for the Busy Executive • www.summary.com Vol. 25, No. 11 (3 parts) Part 1, November 2003 • Order # 25-26 FILE: STRATEGIC MANAGEMENT ® Creating and Sustaining Successful Growth THE INNOVATOR’S SOLUTION THE SUMMARY IN BRIEF Roughly one company in every ten is able to sustain the kind of growth that translates into an above-average increase in shareholder returns over more than a few years. Once a company’s core business has matured, the pursuit of new platforms for growth entails daunting risk — to put it simply, most companies just don’t know how to grow, and pursuing growth the wrong way can be worse than no growth at all. In The Innovator’s Dilemma, Clayton Christensen showed how companies that…show more content…
The Disruptive Innovation Model l Prog ress Pace o in Sustain g Inno vation s f Te gica chnolo Performance That Customers Can Utilize or Absorb Disruptive Innovations Range Of Performance That Customers Can Utilize Time Three Elements of Disruption There are three critical elements of disruption (these were first identified in the book, The Innovator’s Dilemma and are illustrated in the chart at right): ● A rate of improvement that customers can fully use or absorb. This is represented by the dotted line. ● A rate of improvement that goes beyond what customers can fully use or absorb. The pace of technological progress almost always outstrips the ability of customers in any given tier of the market to use it, in part because companies keep striving to make better products that they can sell for higher profit margins to their most demanding, high-end customers. This rate of improvement is shown by the two solid lines in the chart. ● A distinction between sustaining and disruptive innovation. A sustaining innovation targets those demanding, high-end customers with better performance than previously available, whether that performance is an incremental improvement or a breakFor Additional Information on how to know whether your idea has disruptive potential, go to: http://my.summary.com through, leapfrog-over-competitors variety. Disruptive innovations do not attempt to bring better products to
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