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Breakthrough innovation dilemmas

Koen, P. A., Bertels, H. M. J., Elsum, I. R., Orroth, M., & Tollett, B. L. 2010. Breakthrough Innovation Dilemmas. Research Technology Management, November - December 2010: 48-51.

Abstract

While large firms have demonstrated their ability to succeed in breakthrough technology innovations, they have difficulty succeeding with breakthrough business model innovations. Sony changed the way people listen to music with their Walkman and Discman portable music players, but allowed Apple to take over the MP3 market with the iPod and iTunes; Microsoft made a computer in every home a reality but has ceded the search market to Google; Xerox photocopiers reconfigured the business environment but the company hasn't been able to keep Canon from dominating the small, home-copier market. In each of these cases, the incumbent firms had adequate resources, in-depth market understanding, and the required technical core competencies to extend their domination to new or adjacent markets, but new entrants disrupted them with innovative business models. Many believe that these failures can be explained by Christensen's (1997) model, which explains how disrupters can gain market share through a low-price business model. But none of the disruptions described relied on a low-price business model. This ROR project is exploring why business-model innovation is so difficult for large incumbent firms. We have completed preliminary research, developed a new, unified innovation typology that accounts for the additional factors affecting business-model innovation, and are now engaged in a series of case studies to examine how companies manage the dilemmas that undermine efforts at business model innovation.

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