Strategic Innovation in Established Companies
By Constantinos Markides
April 15, 1998
How firms can overcome the obstacles to strategic innovation and break the rules of the game in their industry.
- In May 1959, when Harry Cunningham became president of Kresge, the variety store chain (originally founded in 1897) was second only to Woolworth. In the next few years, Cunningham transformed Kresge (with 803 stores in operation) into the largest discount store in the United States and renamed it Kmart. The decision was a particularly difficult one because, as Cunningham explained, “Discounting at the time had a terrible odor. . . . If I had announced my intentions ahead of time, I never would have made president.”1 Yet the move into discounting rejuvenated the company, and by 1976, Kmart had almost twice the sales volume of Woolworth and was only second behind Sears in general merchandise retailers.
- From 1984 to 1985, Intel decided to exit from the dynamic random access memory (DRAM) business and wholly embrace microchips based on the x86-CISC architecture. The decision completed the company’s transformation from a memory company into a microprocessor company — a move so radical that a mid-level manager commented: “It was kind of like Ford getting out of cars.”2 The move put Intel on an exponential growth curve; in 1996, the company announced record profits of $5.2 billion on sales of $20.8 billion.
- In 1989, when Denis Cassidy took over as chairman of the Boddington Group... To read the complete article, login or sign-up using the form below.
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