The Innovator’s Dilemma? Re-thinking Disruptive Technology in the Hard Disk Drive Industry
by CHIU, Wan Ting A Thesis Submitted to The Hong Kong University of Science and Technology in Partial Fulfillment of the Requirements for the Degree of Master of Philosophy in the Division of Social Science
September 2006, Hong Kong
Table of Contents Title Page
............................................................................................................... i
Acknowledgments .............................................................................................................. ii Table of Contents ............................................................................................................. iv List of Figures
............................................................................................................. vi
List of Tables
........................................................................................................... viii
Abstract
............................................................................................................. ix
Chapter 1
Chapter 2
Chapter 3
The Innovator’s Dilemma .............................................................................. 1 1.1
The Impact of Sustaining and Disruptive Technological Change ................7
Figure 2-1
Intersecting Trajectories of Capacity Demanded versus Capacity Supplied in Disk Drives .............................................................................................27
Figure 3-1
Unit Shipments (in thousands) by Form Factors in 1976-1998 ..................51
Figure 3-2
Average Capacity by Form Factors in 1986-1988 ......................................51
Figure 3-3
Average Capacity by Form Factors in Different Capacity Ranges in 19861988.............................................................................................................52
Figure 3-4
Average Capacity Demand and Supply by Form Factors in <30MB Market in 1986-1988 ...............................................................................................53
Figure 3-5
Average Capacity Demand and Supply by Form Factors in 31-100MB Market in 1986-1988...................................................................................53
Figure 3-6
Average Capacity Demand and Supply by Form Factors in 101-300MB Market in 1986-1988...................................................................................54
Figure 3-7
Average Capacity Demand and Supply by Form Factors in 301-500 MB Market in 1986-1988...................................................................................54
Figure 3-8
Average Capacity Demand and Supply by Form Factors in 501MB-1GB Market in 1986-1988...................................................................................55
Figure 3-9
Average Capacity Demand and Supply by Form Factors in >1GB Market in 1986-1988 ...................................................................................................55
Figure 3-10 Average Areal Density by Form Factors in <30MB Market in 1986-1988 56 Figure 3-11 Average Areal Density by Form Factors in 31-100MB Market in 19861988.............................................................................................................56 Figure 3-12 Average Areal Density by Form Factors in 101-300MB Market in 19861988.............................................................................................................57 Figure 3-13 Average Areal Density by Form Factors in 301-500MB Market in 19861988.............................................................................................................57 Figure 3-14 Average Areal Density by Form Factors in 500MB-1GB Market in 19861988.............................................................................................................58 Figure 3-15 Average Areal Density by Form Factors in >1GB Market in 1986-1988...58 Figure 4-1
Henderson and Clark’s Framework for Defining Innovations....................78 vi
Figure A-1 When Disruptive Technology is Disruptive................................................87
vii
List of Tables Table 1-1
Examples of Disruptive Technologies ..........................................................7
Table 1-2
Summary of the Literature on Disruptive Technologies...............................8
Table 3-1
Distinction between low-end and new market disruption...........................59
Table 3-2
Operationalization of Disruption by both Market Share and Sales Volume .....................................................................................................................59
Table 3-3
Major Application and Form Factor Drives Adopted by Capacity Range (Market Share by Unit Sales) in 1986.........................................................59
Table 3-4
Unit Shipments (in thousands) and Market Share by Form Factors and Capacity Ranges in 1986-88 .......................................................................60
Table 3-5
Unit Shipments (in thousands) and Market Share by Capacity Ranges in 1986-88 .......................................................................................................60
Table 3-6
Summary of Capacity Demand and Supply Rate and Market Share in 19861988.............................................................................................................61
Table 3-7
Unit Price and Price per Megabyte by Form Factors and Capacity Ranges in 1986-1988 ...............................................................................................62
Table 3-8
Summary of Findings in Form Factor Transitions in 1986-88 by Capacity Ranges .........................................................................................................63
Table 4-1
Comparison between Leading and Entrant Firms Using Thin-Film Media Drives ..........................................................................................................78
Table 4-2
Percentage of Hard Disk Drives Using Thin-Film Disks by Form Factors in 1986-1988 ...................................................................................................78
Table 4-3
Highest Areal Density in 1986....................................................................79
Table 4-4
Comparison of Product Variety between Leading and Exit Firms in 1986 .... .....................................................................................................................80
viii
The Innovator’s Dilemma? Re-thinking Disruptive Technology in the Hard Disk Drive Industry by CHIU, Wan Ting
Division of Social Science The Hong Kong University of Science and Technology
Abstract In his book The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail published in 1997, Clayton Christensen provided evidence for disruptions in the hard disk drive industry by examining the technological changes of disk drives. Christensen observed that while each product transitions of disk drives pointed towards straightforward technologies, most established firms failed. By building up a failure framework, Christensen argues that the failures of established firms to respond to simple technological changes lie in their past experience of how they identified and addressed market needs. This thesis critically examines the arguments and evidences in Christensen’s work, and concludes that neither the arguments nor evidences are compelling. The thesis consists of two main parts. First, it critically examines the disruption model, the underlying framework elucidating the phenomenon observed in the hard disk drive industry. By re-examining the industry from 1986 to 1988 with the same data source as Christensen’s, the thesis concludes that the model is not supported by the empirical data in the industry. Second, it revisits and discusses the failures of the established firms in the industry history. Through the same case study as in Christensen’s, the thesis suggests alternative explanations to these firms’ failures and argues that the original analysis of Christensen is deficient.
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