What is the innovators dilemma?
The dilemma is that the criteria that managers use to make the decisions that keep their present businesses healthy make it impossible for them to do the right thing for their future. What’s best for your current business could ruin you for the long term. They’ve been trained to listen closely to customers and do things that improve their margins. Those things are mandatory to keep your present business healthy and stock price high. But they can prevent you from addressing the Internet. Q: How do the Internet and E-commerce challenge companies to change the way they operate? A: When the trajectory of improvements in products and services that a good company offers overshoots what customers in a tier of the market want, it opens the opportunity for a different approach — typically simpler and cheaper ways of doing business. That’s the kind of new opportunity that the Internet offers. Think about Amazon.com, the online bookseller. The old model in bookselling was to build ever-larger st
