The failure network The failure framework is built upon three findings of Christensen’s study:Sustaining versus disruptive technologiesThere is a strategically important distinction between sustaining and disruptive technologies. These two concepts are very different from the incremental-versus-radical distinction. Sustaining technologies tend to give more or better along the features the customers already value (Christensen, Bower, 1995, Disruptive Technologies: Catching the Wave). On the contrary, disruptive technologies change the value proposition of the market. Generally speaking, disruptive technologies perform worse than the established products in markets. However, they have other features that bring new value to customers; they are typically cheaper, smaller and simpler.
In addition, as disruptive technologies tend to be used and appreciated only in new markets of applications, they generally enable the emergence of new markets (Christensen, Bower, 1995, Disruptive Technologies: Catching the Wave).Market needs versus technology improvementThe competitiveness and relevance of different technological approaches can progress faster than market demand. The market competition creates pressure to provide better products and earn higher process and margins compared to competitors.
This results in suppliers to offer more to customers than they need or are willing to pay. Relative to what the market demands, the disruptive technologies may underperform today. However, they mat fully perform the competitiveness in the same market tomorrow. Disruptive technologies versus rational investmentsInvestment in disruptive technologies is not rational financial decision for companies to make. Even though disruptive technologies are cheaper and simpler, they generally do not provide greater profit. Also, they are first commercialized only in the emerging markets. In addition, the most profitable customers of the companies generally do not want or need the products based in disruptive technologies.
(Christensen, The innovators dilemma)