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IME 2016

Text 3

Xerox and the Icarus Paradox

Schilling, Melissa A. Strategic Management of Technological Innovation, Mc Graw-Hill International Edition, Fourth Edition


According to Greek mythology, when King Minos imprisoned the crafstman Daedalus and his son Icarus, Daedalus built wings of wax and feathers so that he and his son could fly to their escape. Icarus was so enthralled by his wings and drawn to the light of the sun that despite his father's warning, he flew too high. The sun melted his wings, crashing Icarus to death in the sea. This was the inspiration for the now well-known Icarus Paradox – that which you excel at can ultimately be your undoing. Success can engender overconfidence, carelessness, and an unquestioning adherence to one's way of doing things.


For example, in the 1960s and 1970s, Xerox had such a stranglehold on the photocopier market that it did not pay much attention when new Japanese competition began to infiltrate the market for smaller, inexpensive copiers. Xerox management did not believe competitors would ever be able to produce machines comparable to Xerox's quality and cost. However, Xerox was dangerously wrong. By the mid-1970s, Xerox was losing market share to the Japanese at an alarming rate. When Canon introduced a copier that sold for less than Xerox's manufacturing costs, Xerox knew it was in trouble and had to engage in a major benchmarking and restructuring effort to turn the company around


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