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It feels like the author hasn't read The Innovator's Dilemma. In it, the author talks about a number of "stable" industries that had existing product lines wit

It feels like the author hasn't read The Innovator's Dilemma. In it, the author talks about a number of "stable" industries that had existing product lines with the R&D, customers, and sales processes to back them up. They were so invested in those structures that as innovations in their industry came along, they missed the innovations. It wasn't because those innovations were bad - many were great - but they didn't fulfill their existing customers' requirements. And so instead of trying to develop new markets (hard!), they ignored the innovations. As a result, new entrants - without the cash cows to worry about - applied those innovations in new areas, building new markets. As those new products caught up with the requirements of the older products, those old customers switched to the new products. I think the next great innovations in energy aren't going to come from the oil companies. It's nothing nefarious, just the simple realization that most of their customers can't use [choose: solar, wind, nuclear, etc] for a variety of reasons. As those other energy sources change, improve, and simplify, those customers may be able to change but we should be looking for the new entrants building the new markets first.

tempestn 11y ago
It seemed like he understood that to me. This quote basically covers it: > Yet, as one BP director replied when I asked why his company continued to risk deep-water drilling, instead of investing in alternative energy: “We are a drilling business, and that is our expertise. Why should we spend our time and money competing in new technology with General Electric or Toshiba?” I think that's why the primary argument is that they should cease R&D entirely and just distribute profits to shareholders until they run out.
- ghaff 11y ago
  The argument being made is really Levitt's marketing myopia argument which at least used to appear in pretty much every Marketing 101 course. [1] The argument is that you should define yourself as a transportation company rather than a railroad (or an energy company instead of an oil company). The problem with this argument is that it doesn't always apply very well. Yes, Kodak had distribution channels for photographs. But very little about the company gave it any particular advantage for digital photography from a technology perspective. Somewhat ironically, Fujifilm--notwithstanding some recent success in relatively niche camera products--has largely weathered the post-film era by applying its technology to medical products and the like. [1] http://academy.clevelandclinic.org/Portals/40/LHC%20Myopia.pdf http://academy.clevelandclinic.org/Portals/40/LHC%20Myopia.p...
  - dagw 11y ago
    Yes, Kodak had distribution channels for photographs. But very little about the company gave it any particular advantage for digital photography from a technology perspective. Yet they completely owned the pro digital camera space in the early 90s. Their problem was that they chose not to build on this lead since they didn't want to cannibalize their more profitable film business.

tempestn 11y ago

It seemed like he understood that to me. This quote basically covers it: > Yet, as one BP director replied when I asked why his company continued to risk deep-water drilling, instead of investing in alternative energy: “We are a drilling business, and that is our expertise. Why should we spend our time and money competing in new technology with General Electric or Toshiba?” I think that's why the primary argument is that they should cease R&D entirely and just distribute profits to shareholders until they run out.

ghaff 11y ago
The argument being made is really Levitt's marketing myopia argument which at least used to appear in pretty much every Marketing 101 course. [1] The argument is that you should define yourself as a transportation company rather than a railroad (or an energy company instead of an oil company). The problem with this argument is that it doesn't always apply very well. Yes, Kodak had distribution channels for photographs. But very little about the company gave it any particular advantage for digital photography from a technology perspective. Somewhat ironically, Fujifilm--notwithstanding some recent success in relatively niche camera products--has largely weathered the post-film era by applying its technology to medical products and the like. [1] http://academy.clevelandclinic.org/Portals/40/LHC%20Myopia.pdf http://academy.clevelandclinic.org/Portals/40/LHC%20Myopia.p...
- dagw 11y ago
  Yes, Kodak had distribution channels for photographs. But very little about the company gave it any particular advantage for digital photography from a technology perspective. Yet they completely owned the pro digital camera space in the early 90s. Their problem was that they chose not to build on this lead since they didn't want to cannibalize their more profitable film business.