The Innovator’s Dilemma is a powerful business framework, characterizing when incumbent businesses ignore disruptive technologies for 3 main reasons: listening too closely to their mainstream market customers, targeting higher margin products which thus leads to higher cost structures, and ignoring small new markets due to large growth forecasts. Managers are usually rational in their decision-making, but don’t have incentives in place to pursue the lower-margin and smaller disruptive markets. Using examples across the disk drive, steel, discount retailing, and accounting industries, we explore times when large incumbents suffered at the hands of the innovator's dilemma. We'll close off with Christensen's prescient 1997 case study on avoiding the innovator's dilemma, where he hypothesized, as an auto executive, how he would deal with the looming disruptive innovation: electric vehicles. 

The Innovator's Dilemma - Clayton Christensen