“Strategic Choices” Christensen Munir Mandviwalla Fox 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? IncumbentsDisruptive 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