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

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

• Presentation by
• Sanporn Sampaongern
• Chris Safley

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The Reconfiguration of Existing Product
Technologies and the Failure of Established Firms

• Architectural Innovation

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How minor innovation often creates problems or
competitive consequences for established firms.

• Conceptual Framework
• Innovation in Photolithographic Alignment
  Equipment

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Conceptual Framework

• Component and Architectural Knowledge
• Types of Technological Change
• The Evolution of Component and Architectural
  Knowledge
• Channels Filters and Strategies
• Problems Created by Architectural Innovation

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Component and Architectural Knowledge
Conceptual Framework

• Component knowledge
• Architectural knowledge

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Types of Technological Change
Core concepts Reinforced
Overturned
Linkage between core concepts and
components Changed Unchanged
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The Evolution of Component and Architectural
Knowledge
Conceptual Framework

• A dominant design concept
• Once a dominant design is established progress
  involves improvements in the components within
  the framework of a stable architecture.
• Firms stop investing in learning about
  alternative configurations of established
  components. New component knowledge becomes more
  valuable to a firm than new architectural
  knowledge.

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Channels Filters and Strategies
Conceptual Framework

• The communication channels information
  filters and strategies an organization uses help
  it deal with complexity.
• Communication channels
• Information filters
• Problem-solving strategies

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Problems Created by Architectural Innovation
Conceptual Framework

• Established firms require significant time and
  resources to identify an innovation as
  architectural
• Once the organization has identified an
  innovation as architectural it can be difficult
  to build and apply new architectural knowledge
  effectively

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The Semiconductor Photolithographic Alignment
Equipment Industry

• Used in manufacture of solid-state semiconductor
  devices
• Used to
• position mask relative to wafer
• hold the two in place
• and expose resist

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The Semiconductor Photolithographic Alignment
Equipment Industry

• Evolution of PAEs
• Contact aligners
• Proximity aligners
• Scanning projection
• First-generation stepper
• Second-generation stepper

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Why study the Industry

• Relatively small number of firms and quick rate
  of technological innovation

• Industry has gone through 4 waves of
  architectural innovation each resulting in new
  entrant capturing market leadership

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About the study

• Field-based study of industry
• Data was collected over a 2 year period
• Included data from 1962 1986
• Collected by primary and secondary sources
• Core data set of
• RD costs
• Sales revenue
• Managerial and technical history of projects

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About the study

• Supplemental data from interviews with project
  development team members
• Validation of data from interviewees and others
  that knew the firms histories

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The case Kasper Instruments

• Company overview
• What happened
• Why

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Conclusion

• Things to remember
• Address the natural inclination
• Organizational learning
• Architectural innovation used as a tool