Successful Development and Commercialization of Technological Innovation: Insights Based on Strategy Type

Abstract

How can market leaders avoid the innovator’s dilemma and continually develop disruptive innovations to retain their leadership position? We argue that the capability to successfully develop and commercialize one type of disruptive innovation—technological innovation—is based on the interaction between a firm’s strategic orientation (Prospector, Analyzer, Defender) and (1) its selection of target market; and (2) the way it implements its market orientation. The insights offered by this framework assist in predicting whether a firm’s strategic orientation enhances or thwarts its ability to successfully commercialize disruptive innovations and also suggests the development of critical, yet contradictory, skill sets in order to remain successful over time. How can industry leaders reinvent themselves by developing and successfully commercializing disruptive innovations that challenge their existing business models? Known as the innovator’s dilemma, Christensen (1997) argued that market leaders have difficulty diverting resources from the development of sustaining innovations, which address known customer needs in established markets, to the development of disruptive innovations, which often underperform established products in mainstream markets but offer benefits some emerging customers value. Christensen’s (1997) initial research focused primarily on technological innovations, broadly defined as those that introduce a different set of features, performance, and price attributes relative to existing products and technologies. In other words, technological innovations create new products based on new underlying technological underpinnings. Over time, further developments improve the new technology’s performance on the attributes mainstream customers do value, to a level where the new technology begins to cannibalize the existing technology. This progression reflects the classic S-shaped curve prevalent in the