In the theory of disruptive innovation, Clayton Christensen argues that the incumbent companies introduce new and improved products year-by-year with the sustaining innovations, which eventually overshoot the performance that some customers can use because companies innovate faster than customers’ lives change. Overshooting creates opportunities for firms to change the basis of competition in order to earn above-average profits. After functionality and reliability have become goo enough, for example, the next competition dimensions could be convenience, customization, and price, etc. Continue reading
Legendary former Intel CEO Andy Grove left us recently. Wearing many hats, he is an entrepreneur, a teacher, a writer, a philanthropist, etc. As Marc Andreessen says on Twitter, he is “the best company builder Silicon Valley has ever seen, and likely will ever see“. Even after more than thirty years, his book “High Output Management” is still a must-read for all middle level managers.
In his another best-seller book, “Only the Paranoid Survive“, he introduced the concepts such as “strategic inflection point” and “strategic dissonance”, which have become part of the lexicon both in academia and in practice. A strategic inflection point is a time in the life of business when its fundamentals are about to change. That change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end.
Andy Grove steered Intel through several strategic inflection points, for example, the shift from the memory business to microprocessors when they realized they couldn’t keep up with Japanese competition. Soon Intel will face another inflection point. Actually this new inflection point already started. Unfortunately, Intel doesn’t have Andy Grove any longer. Continue reading