Isn't this basically the phenomenon known as low-end disruption/upmarket migration? [1] Which is often viewed as an unhealthy sign for a company that recognizes

Isn't this basically the phenomenon known as low-end disruption/upmarket migration? [1] Which is often viewed as an unhealthy sign for a company that recognizes it can't keep up with efficiency of a new market entrant but unwilling or unable to make changes to their business model to stay competitive. The trap being that it's a rational decision at the beginning to focus on the most profitable lines of business with highest margins. But the disruptor then captures the value of the abandoned market to finance innovations to move up into higher margin tiers, forcing another retreat. The cycle can repeat until the once dominant firm is relegated to a tiny niche with no growth prospects or until fixed costs exceed dwindling revenues thus eventually resulting in insolvency/acquisition. I remember learning about it from a case study of how American companies like GE and GM reacted in different ways to Japanese competition emerging in the 70s and 80s. It's not always a bad strategy but I think a pre-IPO company that's only a fear years old would generally prefer to grow the size of their potential market vs. shrink it preemptively. [1] https://online.hbs.edu/blog/post/low-end-disruption https://online.hbs.edu/blog/post/low-end-disruption