By a new technology that changes the nature of the value proposition, for customers. Warren Buffett seeks monopolies (like Coke). He avoids high technology bec

By a new technology that changes the nature of the value proposition, for customers. Warren Buffett seeks monopolies (like Coke). He avoids high technology because of the uncertainty of technology revolutions (they can still happen but less often; and even less likely to alter the nature of the value proposition - though note that coke, chocolate and chewing gum were new technologies at one time...). - Schumpeter's theory of "creative destructionism"[1] shows how innovations can make monopolies irrelevant. - Clayton Christiansen's "disruptive innovation"[2] is similar. He tracks the disk drive industry, and notes that incumbents retain their leadership through technology changes - unless they change the nature of the value proposition for customers. ie. no longer more of the same, but different tradeoffs. More precisely: a change in the ranking of benefits in the customer value proposition. e.g. Today's shift from HDD to SDD. [edit: he also predicted the 1.8 inch HDD to rise in a new market that valued its attribute ranking differently - pre-iPod] - Geoffrey Moore's "Crossing the Chasm"[3] is a more concrete analysis about the adoption of innovations. He notes that once a leader is enshrined as the leader, the market actively works to support them, granting them leeway never given to the also-rans. He gives lots of reasons, but mainly it's mainly derived from observation. This leadership has some of the qualities of a monopoly. It seems to be pretty hard to lose, except when the basis of it changes. i.e. when it "becomes irrelevant". [1] http://en.wikipedia.org/wiki/Joseph_Schumpeter#Schumpeter_and_capitalism.27s_demise http://en.wikipedia.org/wiki/Joseph_Schumpeter#Schumpeter_an... [2] http://www.businessweek.com/chapter/christensen.htm http://www.businessweek.com/chapter/christensen.htm [3] http://www.parkerhill.com/Summary%20of%20Crossing%20the%20Chasm.pdf http://www.parkerhill.com/Summary%20of%20Crossing%20the%20Ch...