[SatvikBeri]

The Innovator's Solution goes over this in detail, using Cisco as a prominent example.

The incentives at large companies basically make certain types of innovations very difficult to create from within. Large companies tend to have a very fixed set of cost structures and margins. That means that products that would be lower margin are almost automatically deprioritized-even with specific CEO attention it's nearly impossible to change resource allocation processes to foster this kind of innovation.

Instead, the recommended option is to create a subsidiary with no existing cost structure or processes. That subsidiary can then focus on making the new product succeed since it's the only way for them to survive.

Once the subsidiary takes off, you usually do not want to fold it back into the main organization-you'll lose all the advantages that allowed it to succeed in the first place! (There are exceptions, and the book goes into detail on when to integrate and when to give the subsidiary autonomy.)

Buying up new companies is another alternative to starting subsidiaries yourself.