Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms

1587 Words Feb 21st, 2013 7 Pages
Architecturai Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms Rebecca M. Henderson
Massachusetts Institute of Technology

Kim B. Clark
Harvard University

This paper demonstrates that the traditional categorization of innovation as either incremental or radical is incomplete and potentially misleading and does not account for the sometimes disastrous effects on industry incumbents of seemingly minor improvements in technological products. We examine such innovations more closely and, distinguishing between the components of a product and the ways they are integrated into the system that is the product "architecture," define them as innovations that change the architecture of a product
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The irony of the situation was not tost on the R&D engineers: for many years Sony's radios were produced with technology licensed from RCA, yet RCA had great difficulty matching Sony's product in the marketplace (Clark, 1987). Existing models that rely on the simple distinction between radical and incremental innovation provide little insight into the reasons why such apparently minor or straightforward innovations should have such consequences. In this paper, we develop and apply a model that grew out of research in the automotive, machine tool, and ceramics industries that helps to explain how minor innovations can have great competitive consequences. CONCEPTUAL FRAMEWORK Component and Architectural Knowledge In this paper, we focus on the problem of product development, taking as the unit of analysis a manufactured product sold to an end user and designed, engineered, and manufactured by a single product-development organization. We define innovations that change the way in which the components of a product are linked together, while leaving the core design concepts (and thus the basic knowledge underlying the components) untouched, as "architectural" innovation.^ This is the kind of innovation that confronted Xerox and RCA. It destroys the usefulness of a firm's architectural knowledge but preserves the usefulness of its knowledge about the product's components. IQ/ASa March 199D

In ^Hiier drafts of t h ^ paper we referred to

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