Architectural innovation and the emergence of a dominant design: The effects of strategic sourcing on performance

• Published in: Research policy Vol. 47; no. 1; pp. 326 - 341
• Main Authors: Park, Woo-Yong, Ro, Young K., Kim, Namwoon
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.02.2018
• Subjects: Architectural innovation; Dominant design; In-house design; Long-term relationship; Make strategy; New supplier relationship; New supplier relationship; Architectural innovation; Make strategy; Long-term relationship; Dominant design; In-house design
• ISSN: 0048-7333; 1873-7625
• DOI: 10.1016/j.respol.2017.11.003

•Investigates four different sourcing strategies employed by firms to deal with a new architectural innovation.•Provides a synthesized performance model of the four strategies before and after dominant design emergence.•Provides theoretical hints as to the strategic critical path over time when dealing with a new architectural innovation. This study investigates four different sourcing strategies employed by firms in order to successfully deal with a new architectural innovation hitting the market. The four sourcing approaches reflect the varying degrees of internalization of component design and manufacturing: make, in-house design, long-term supplier, and new supplier, where make implies the highest and new supplier the lowest degree of internalization of the firm’s component sourcing in a spectrum. Comparing and contrasting the innovation performance of the four sourcing approaches in the pre- and post-dominant design eras, we suggest theoretical implications for the critical path of strategic sourcing decisions over time for a new architectural innovation. By doing so, we suggest an integrated framework of stage-contingent sourcing strategies and provide the associated empirical results that demonstrate normative strategic guidance for managers.