Why Great Companies Fail: Clayton Christensen’s Innovator’s Dilemma

Clayton Christensen’s influential business theory regarding disruptive innovation. It explains the central paradox where successful corporations fail not because of poor management, but because they prioritize their most profitable customers over emerging, lower-margin technologies. The analysis distinguishes between sustaining innovations, which improve existing products, and disruptive technologies, which start in small markets and eventually overtake industry leaders. Through frameworks like Resources, Processes, and Values, the source illustrates why internal rigidities prevent established firms from adapting to change. Real-world examples, such as the disk drive and steel industries, serve to validate these strategic principles. Finally, the discussion offers practical solutions for survival, suggesting that companies must create independent organizations to explore new markets without the constraints of their traditional business models.