Xiameter : the Past & Future of a “Disruptive Innovation

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IMD433 v. 21.02.2011 The Past and Future of a “Disruptive Innovation” Ron Fillmore was a happy man. Recently promoted to executive director position at Dow Corning Corporation, he headed the company’s Xiameter business, a unit that sold online lowprice/no-frills commodity silicones. Since its launch Xiameter’s performance had gone from strength to strength. Considered by many inside Dow Corning as a “disruptive innovation” in the chemical industry, Xiameter had significantly contributed to the company’s overall sales and profit growth. Fillmore had inherited an undeniable success story. Research Associate Inna Francis prepared this case under the supervision of Professor Kamran Kashani as a basis for class discussion rather than to illustrate either effective or ineffective handling of a business situation. Certain data and financial information have been disguised. This case won the 2011 ecch Case Award in the category Marketing. Yet he was not complacent. In Dow Corning’s recent history complacency had once before undermined corporate performance. He could not let this happen to Xiameter. Fillmore saw his job as protecting the business from growing competitive threats and answering the “What next?” question for its future. As an optimist he saw promising future directions. Skeptics outside of the company who had followed Xiameter’s development were less optimistic. They questioned Xiameter’s future viability against growing competition. Its first-mover advantage, they asserted, was fast eroding and unsustainable. Some suggested a fundamental change in the brand strategy. A few pessimists even suggested that Dow Corning should spin off and sell Xiameter as a separate entity. Who was right? The optimists inside the company who continued to see a bright future for Xiameter? Or the pessimists outside who believed that Xiameter’s party was over? Sitting in

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