Blog 4: Large Companies and Innovation

Christensen writes that managers are faced with the dilemma of balancing short-term decisions while focusing on innovation and many don't do this well. Here are some of my reflections on his findings:

• Finding new market for disruptive technology instead of developing new technology to meet current market needs. This theme ties into managers' dilemma of balancing short-term needs (meeting demands of current market) and innovation. This is much easier for larger companies to deal with because they have enough resources to allocate to handle current business needs and researching costs for innovative ideas. One company that does this well is Amazon. It is able to retain current customers through its Prime services (through B2C services) and it is able to invest in new technologies to attract different markets, through B2B services such as its AWS services and the potentially selling its Amazon Go technology to other retailers. This approach makes sense because if Amazon only focuses on Prime services, it risks cannabolization because consumers' spending power is often limited and a new group of consumers means more points of sales. 
• Innovation is driven by allocation of resources. This is an underlying theme to many of his findings. It seems that many big companies are better suited to this than startups and smaller organizations. Although large companies may not be as agile as startups, they can outspend any upcoming contenders. Take Facebook as an example. It has a history of buying smaller companies that competed against it. It purchased Instagram, WhatsApp, and the latest acquisition, Giphy because they were all competing against its platform. It not only gained innovation, but new markets and users. Large companies may be slower to develop new products, but it really doesn't matter because they can purchase their competitors.