Christensen et al. reported “cases of products with inferior performance taking market share” (= disruptive innovation) For example, in the HDD market, products with small capacities have displaced products with large capacities.
- Clayton M. Christensen, Joseph L. Bower (1996) “Customer power, strategic investment, and the failure of leading firms.” Strategic Management Journal
- Adapted from The Innovation Dilemma p.10
nishio Sometimes innovation occurs when a lower performance product based on the same technology as an existing product is introduced to the market. It is called disruptive innovation. This is called disruptive innovation.
Improvements in performance due to technological advances often overtake the performance demanded by the market. Before overtaking the market, it is believed that “improving performance X is customer value,” and in fact, products with high performance X are highly evaluated in the market. However, once the market overtakes the product, the high performance of X is no longer appealing to customers, and customers will choose products based not on the amount of performance of X, but on the other performance of Y.
- nishio
- A product that has the advantage of low price compared to existing products and the disadvantage of low performance will take over the market for existing products as technological advances lead to a situation where “performance is low, but it is sufficient for my needs”.
- If the advantage is not limited to “low price”, this kind of example would be possible. Scripting languages have the advantage of “ease of use” and the disadvantage of “slow speed” compared to existing C and other languages, and when they first appeared, the slow speed was a problem and not adequate for most needs. However, as computers became faster with the advancement of technology, the market share increased greatly because “this is sufficient for my needs,” even though the disadvantage of being “considerably slower than C and other languages” has not changed.
- The reason why companies allocate costs for continuous improvement beyond customer needs is because it is easy to decision-making to allocate costs to the known customer needs. However, if they do this repeatedly, they will accept the demands of their existing customers and keep improving the performance of their products, which will lead to over-quality, and they will be replaced by cheaper, lower-quality products.
- Personally, I don’t feel comfortable including this “incremental innovation” in “innovation,” but I think it’s useful to look at it from the perspective of “these three ways of advancing technology.”
2014-06-15 Tissue Conference Presentation Slides Paper (4p)
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