Session9 Flashcards
Innovation Types
- Radical vs Incremental (Degree of Novelty)
- Product vs Process (Input/Output)
- Architecture vs Component (Scope)
Modularity Definition
Definition:
- A product system is modular when it can be decomposed into components that can be mixed and matched.
Characteristics:
- One-to-one mapping between components and functions
- Standardised interfaces
Advantages of Modularity
Advantages:
- Increased efficiency:
- Division of labour
- Market coordination
- Increased flexibility:
- Parallel search
- Upgradeability
- Economies of substitution
Types of Modularity
Product Modularity:
- PCs, Smartphones
- Leverages user skills
Design Modularity:
- Chip/software design
- Supports variety with similar components
Production Modularity:
- Automotive, construction
- Enables global outsourcing
Costs of Modularity
Costs:
- High initial setup cost
- Trade-offs:
- Performance vs Variety
- Speed vs Breadth of search
- Potential supplier power issues
Integrality and 3D Printing
Integrality:
- 3D printing promotes integrality by simplifying components.
Example: GE Catalyst engine reduced 855 parts to 12.
Henderson and Clark’s Message
Key Insight:
- Product architecture shapes organisational structure.
- Examples:
- Communication channels
- Information filters
- Organisational routines
Mirroring Hypothesis
Definition:
- Organisational structures mirror technical structures.
- Examples:
- Melvin Conway’s Law
- Colfer & Baldwin’s work on project ties and dependencies
Lessons from Tesla
Key Lessons:
- Complex product architecture causes manufacturing issues.
- High-performing modules can offer competitive entry points.
- Products often evolve from integral to modular designs.
Challenges for Incumbents
Why incumbents struggle:
- Incremental innovations require changes in organisational structures tied to existing product architectures.
- Small firms may handle radical innovations better.
