Chapter 2

Willingness to Cannibalize Successful Products

 

Today's emerging giants face a paradox. Their continued success requires turning away from what made them successful.

—Tarun Khanna, Jaeyong Song, and Kyungmook Lee1

THE HISTORY OF INNOVATION is littered with firms that pioneered and dominated markets but failed to capitalize on their leadership. Often, the dominant firm failed to capture an emergent market that splintered from the old market. Chapter 1 cites the examples of Sony in digital music, Xerox in the electronic office, Microsoft in search, Kodak in digital photography, Nokia in smart phones, and HP in tablet computers. One important reason for this failure was a reluctance to cannibalize the incumbent's successful products. ...

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