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Product maturity and architecture evolution in complex industries

Posted on:2009-09-05Degree:Ph.DType:Dissertation
University:Ecole Polytechnique, Montreal (Canada)Candidate:Kamel, MichaelFull Text:PDF
GTID:1449390005458997Subject:Business Administration
Abstract/Summary:
Disruptive innovation has become one of the most studied causes of industrial evolution in recent years. In the wake of the ICT (Information and Communications Technologies) bubble, many researchers have focused on explaining how successful companies with strong strategic positions have failed and were driven out of the market by entrants. One of the most prevalent results of such studies was the disruptive innovation theory by Christensen, Raynor and Chesbrough (Christensen, 1997; Raynor and Christensen, 2002; Chesbrough, 2004). The three studied the disk-drive industry; an industry that has demonstrated entire product lifecycles in relatively short time spans conducive to research.;Disruptive innovation, as observed in Complex Product System (CoPS) industries, diverges significantly from this hypothesized pattern. A study of the aviation training industry, as an example of a CoPS industry, has revealed that in response to technological maturity, the product architecture has gone towards further closure instead of openness. The product architecture of the individual training product has remained closed despite its technological maturity and the ability of simulation providers to satisfy and exceed all the requirements stipulated by the regulatory standards. At the product suite level, the legacy open architecture based on acquiring different training devices from different suppliers has changed into closed proprietary training suites that offer seamless integration around a common core of simulation software. At the training services level, a similar closure trend was observed replacing the distinct phases of training, each conducted in a different market, with integrated training providers and a new integrated training license.;The evolution of the aviation training industry, as opposed to disruptive innovation theory, was shown to be influenced by the importance of accumulation of learning, the involvement and technical expertise of clients and the regulation requirements in the industry limiting the role of market selection of innovations. Furthermore, public safety and legal liability risks disfavored open architectures. Finally, the thinness of the market for simulation products also limited the industry's ability to develop a network of specialized component providers able to innovate in parallel based on a standard product architecture.;The resulting disruptive innovation theory proposed that industries offer proprietary architecture products throughout their technological maturity path until the incumbent suppliers of the industry mature and start to exceed the clients' needs, catering to the specialized wishes of high-end clients. This opens the door for entrants into the industry catering to low-end and cost or flexibility-sensitive consumers. With technological advancement of the entrants, their products satisfy the needs of mainstream customers and hence start competing against those offered by incumbents. The new entrants' lower cost advantage is then further enhanced by the opening of the product architecture to enable specialization and parallel innovation on product components therefore shifting competition from technical merit to cost or flexibility. The entrants then drive the incumbents out of the industry until the standard product architecture they use becomes unable to support further development and innovation. Other entrants then offer closed proprietary product architectures of superior capabilities and with time displace their predecessors as the suppliers of the mainstream clients. This alternation between architecture openness and closure continues as product standards are defined, developed and eventually replaced by new standards when obsolete.
Keywords/Search Tags:Product, Architecture, Evolution, Disruptive innovation, Maturity, Training, Industry
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