A the position of a firm. For leading
A threat to one is an opportunity for others; yet according to the article, established firms have not been successful in capitalising on this blessing in disguise. This article analysed the internal behaviour of firms to suggest palatable insights as to why firms fall victim to architectural innovation, with reasons such as rigid communication channels and information filter system. However, I believe that this phenomenon can also be evaluated from a broader perspective, depending on the circumstances in the industry and the position of a firm.
For leading firms, they will have a greater propensity to engage in incremental innovation. Firstly, with an already established proven design, it is less efficient for firms to focus on the other forms of innovation. Radical innovation involves huge investment and high risk; modular innovation requires looking into alternative core concepts, away from the dominant design; and architectural innovation is deemed unnecessary.Hence, firms will be more inclined to take advantage of its already proven design by constantly improving the components and less likely to venture into the other unproven and riskier avenues. Secondly, with specialization and division of labour, and resources dedicated to specific tasks, firms will obliviously adopt a myopic perspective in terms of potential technological advancement of their product.
With a myopic outlook, the firms’ capability to recognise possible reconfiguration of components will be hindered, hence resulting in their inclination towards incremental instead of architectural innovation.And even if they attempt to embrace architectural innovation, their lack of commitment towards and complete understanding of the innovation will cripple their endeavour, as witnessed in Kasper’s contact aligner with proximity mode. However, in the case of rival firms aiming to capture market leadership, they recognise that product differentiation in terms of better technology is crucial, hence their strategy will be different. Since the current designs of the rival firms are already inferior to that of the leading firm, incremental innovation will be deemed least impactful to the market.Instead, they will engage in the other forms of innovation to exact substantial difference to their product.
As the type of innovations increases in complication, investment and risk increases proportionately too. This means that the more resourceful and radical a firm is, the more intensive its R&D will be geared towards overturning core concepts and restructuring of the relationships between concepts and components. Therefore, small entrant firms will tend to engage in architectural innovation in their technological advancement process.In my opinion, a leading firm’s inability to recognise architectural innovation, compounded by rival firm’s success in architectural innovation, are the two main reasons that result in the drastic changes as stated in the article. For firms with activities revolving around a specific task, they will be less cognizant of room for improvements in their recurring processes, which is every firm’s greatest obstacle towards architectural innovation. In a typical business context, firms approach consulting firms i.
McKinsey and Bain&Co, to identify their organizational flaws, as these external parties have better and unbiased discerning ability. Therefore, in order to overcome this shortfall, I feel that firms can engage in external assistance and interact with external parties, like how Procter and Gamble successfully engaged in a free flowing exchange of innovations and technology with external parties in the Harvard Business Review article, “Connect and Develop”.