Commercialization of Disruptive Technologies : Revisiting the Value Network Theory and the Failures of Leading Incumbents in the Hard Disk Drive Industry

In his /The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail/ published in 1997, Clayton Christensen presents his arguments of how and why leading incumbents failed to respond to the technological straightforward changes in the hard disk drive industry and thus went bankruptcy. There is already a large body of literature explaining firms' success and failures by their technological and organizational capabilities. Beyond these capabilities, Christensen proposes the third theory - the value network theory - to explain why good firms could fail. This paper revisits the failures of such firms in the hard disk drive industry. With a case study of how a prominent hard disk drive manufacturer, Seagate Technology, missed the opportunities to commercialize its 3.5-inch drives in the 5.25- to 3.5-inch form factor transition, this paper aims to provide insights of what the important element in a firm's value network might be to determine its success or failure in technological changes. Contrary to Christensen's analysis which discounts the needs for incumbents to focus on existing business, this paper argues that in the phase of disruptive technological changes, incumbents need to pay even closer attention to the needs of their established customers