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by qCOVET
3935 days ago
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From the author - Clay Christensen himself: "Consider the hegemony of Detroit’s Big Three—General Motors, Ford, and Chrysler. At one time, they dominated the auto industry, producing bigger, faster, safer, more comfortable cars with more and more features. But these improving products also “create a vacuum underneath them,” Christensen says, “and disruptive innovators suck customers in with fewer features and a cheaper price.” Toyota, Honda, and Nissan disrupted the Big Three’s marketplace by introducing smaller, lighter, less safe, and less comfortable but reliable cars that needed few repairs and got good gas mileage—at a significantly lower price. Within a few years, they had garnered a large share of the market. Says Christensen: “The leaders get killed from below.” A Toyota car, is a Toyota car that was designed to be a car..it was not designed for some other purpose and re-purposed for transportation. Reference: http://harvardmagazine.com/2014/07/disruptive-genius |
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This explanation works cross purposes with his actual book, which uses the example of Honda, Kawasaki, and Yamaha vs Harley-Davidson and BMW. The Japanese offroad bikes are very precisely not designed for street driving, and were repurposed. It also covers backhoes vs diggers, and how people now use backhoes even for normal digging jobs. And hard drive minification. I lent out my copy to our marketing intern, or I'd pull quotes.
It also disagrees with his own quote: "Sustaining innovation makes good products better—but then you don’t buy the old product. They’re replacements. They do not create growth." Honda didn't just take a Ford Falcon design from 5 years ago and sell it at a steep discount. They had designs suitable for the Japanese market, that suddenly became popular when the oil embargo hit in '73. Because Civics were a substantially different car, the Big 3 couldn't just pull their old designs off the shelves, and it's not like the market for the Big 3's used cars took off.
ZTE phones are essentially phones from 2 years ago, at market clearing (lower) price. You don't need to reach for disruptive vs sustaining innovation to explain why ZTE is gaining marketshare when simple supply & demand curves will do the trick. AFAICT, the only innovation on display here is making less profits.