What was it Wayne Gretzky said about why he was so good at hockey? He just skated to where the puck was going next. Executives and investors wish they could do so, too--to sense where profits are going next. Following a six-year study of profitability patterns, the authors have developed a model for doing just that. In the early stages of a product's evolution, companies compete on the basis of performance. And because they can't make substantial improvements in product performance unless the entire value chain is housed under one organizational roof, it works best if companies are vertically integrated. But as the underlying technology improves to meet the needs of most customers, companies begin to compete on the basis of convenience, customization, price, and flexibility. At that point, vertical integration is no longer an advantage--in fact, it quickly becomes a disadvantage. Different links in the industry value chain become modular, and the chain subsequently fragments. In either stage, most profitability goes to the companies that own the interdependent links in the value chain--the places where everyone's still vying to satisfy their customers with ever-better product functionality. Initially, that's the makers of the proprietary products aimed at the end-use consumers. But as those products become standardized, profitability shifts to the makers of components, and as components themselves become standardized, it can shift further back in the value chain. That's predictable, but it causes a problem for incumbents. As their products become commodities and profits decline, pressure from investors to maintain ROA causes them to spin off asset-intensive units that design and manufacture components--the very places where profits are heading.

Describes the creation and operation of the initial two heavyweight teams for new drug development and launch. The primary focus is on one of the teams, Evista, although comparisons to the other team, Zyprexa, are included. Lilly must decide the next phase (postlaunch) for managing Evista's rollout.

Describes managing the threat of disruptive technology at the high end of the computer industry. Many aspects of the innovator's dilemma can be explored.

Volant brought innovation to the ski equipment industry in 1989 by developing a stainless steel ski. He claimed the skis could turn more easily, could hold an edge in icy conditions, and were more stable than aluminum or fiberglass skis. The company's "soft-flex" technology was patented, and soon word spread throughout the skiing community about the new high-performance ski. The company decided to offer a narrow product line. In 1995, Volant was unable to fulfill all its orders due to lingering manufacturing problems. A new operations manager came in and improved manufacturing yields, lowered costs significantly, and brought in a CAD/CAM system to streamline prototype design. The 1997 season was heralded by on-time delivery of promised shipments, and the company's reputation climbed. With the leader in the ski equipment industry capturing less than 25% of the market, Volant considered its strategy for competing in a fragmented market. In 1994, hourglass-shaped skis became a new trend, and Volant decided to make shaped skis exclusively. They also acquired the rights to a snowboard design at its manufacturing facility in Denver. Although Volant was the fourth best-selling supplier in the United States by 1998, it still was not a profitable company. It had to consider new growth strategies to become a leader in its industry and to yield a return for its investors.