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2.  Complex and Dynamic Market Chains
 Rapid Market Changes
 Shrinking Product Life Cycles
 Unique Cost Structure
 Network Effects
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3.  There is less vertical integration, resulting in long market
chains with many organizations along the chain
 At the downstream end there are sometimes many niche
market opportunities
 Market chains are in many cases unstable, with many
companies moving up and down the chain
 Successful strategies require developing strong relationships
with various players along the value chain
 Relationships can be focused on sales, marketing, operations
or technology
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5.  New emerging technologies and disruptive technologies
create changes , resulting in discontinuities
 Disruptive, enabling technologies can invalidate products or
entire business models
 Difficulty predicting the evolution of customer feature
demands and use models
 Strategic decisions cannot rely on conventional market
research and assumptions
 Strategic plans must be dynamic and allow for rapid changes
and modifications or be able to withstand change
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6. 6

7.  Rapidly shrinking product development cycles allowing fast
introduction of new features and products creating
cannibalization
 Too many features are developed – resulting in high
development costs and complicated products
 Shrinking product/technology Adoption cycles resulting in
shorter product life span
 Developing a platform strategy that will allow introducing
new products on the platform
 Achieving rapid high sales volume by expanding to many
global markets and offering low prices
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9. The Chasm
Innovation
Visionaries Pragmatists Conservatives Laggards
Adopters
Follow instincts Analyzers
Revolutionary Prefer steady
change
Rule Breakers
Rule followers
Avoid Crowd
Crowd followers
Risk takers Avoid risk
See future See today’s
possibilities problems
5% 40% 40% 13%
2%
LIfe Cycle

10.  High upfront fixed costs of research and development and low
marginal production costs
 Results in high priced products upon introduction with rapidly
dropping prices
 Companies must achieve high volume sales quickly, resulting
in strong price competition
 Strategies must identify means for reducing upfront fixed
costs, such as outsourcing
 Marketing must focus on achieving high volumes quickly
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11.  The value of a product or service to the user depends on the
number of other users or if more complements become available
 Largely rely on standardized or competing platforms or components
developed by other vendors
 Encourages companies to invest heavily to become industry
standards, or at least to comply with standards
 It is common for companies to give away a basic version of their
product to encourage adoption and become the standard
 The most successful companies are those who build multi-sided
platforms (MSPs), which spawn large ecosystems of users and
suppliers of complementary products and services
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12. 1. Lack of Market Segment Focus
2. Excessive Pace of Product Improvement
3. Incomplete solutions
4. Too many features
5. Channel mismanagement
6. Failure to Establish the Right Competitive Barriers
7. Misinterpretation of the Technology Adoption Lifecycle
Model
8. Irrelevant Market Research
9. New development vs. product customization
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