“Strategic Choices”Christensen

Munir MandviwallaFox School of Business

Temple University

Consumers

Signals of change

Companies

Competitive battles

Strategic choices

Inside the firm

Source: Christensen, C., Anthony, S., and Roth, E. “Seeing What’s Next: Using the Theories of Innovation to Predict Industry Change.” Harvard Business School Press, 2006, p.2.

How do you select the “right”

initial market

How do you design the “right”

organizational structure

How do you respond to disruption?

Incumbents

Disruptive new firms

Preparation

• Strategy making• Encourage emergent

strategy (in contrast with deliberate)

• Infrastructure that encourages experimentation (in contrast with large upfront investment)

• Willingness to learn and adapt

• Planning that tests and reacts rather than assumes

• Hiring• Anticipate and collect

“pools of experience”• Attitude vs. knowledge• Specific experience vs.

experience in adapting• Funding• Staging• Types of investors (VC,

friends, internal)• Values of investors• “Interference” from

investors

Value networks

• The value network• Suppliers• Customers• Retailers• Distributors• (partners)

• Challenges of overlapping• Choke points limit

asymmetries• Pressure to conform to the

network• Incumbents can easily

respond (by leveraging the overlap)

• The danger of co-option vs. up-market retreat

Mastering disruption

• The “spinout” organization• (an incumbent disrupting

itself)• Setup a completely

separate business unit• Critical success factor:

Impose established processes vs. new process and value creation

• More effective when the incumbent lacks the skills and will

• Less effective for sustaining innovations where the established processes can be leverage

• Develop internal capability• (become a serial

disrupter)• Champion• Specific team and

processes• Training• No obvious examples of

success

Strategic choices