Title: Modularity in the mediation of market and technology change

Authors: Ron Sanchez

Addresses: Department of Innovation and Organizational Economics, Copenhagen Business School, Kilevej 14A – 3rd Floor, DK-2000 Frederiksberg, Denmark; Division of Engineering and Technology Management, National University of Singapore, Singapore

Abstract: This paper examines the roles of product and process architectures in mediating market and technological change in a product market. The product and process architectures in use in a product market are defined as the technological platforms for the market. Platforms are then distinguished by whether they are based on integrated or modular architectures, and by whether they are closed systems or open systems in their availability to firms in a product market. Two polar cases – closed-system integrated platforms and open-system modular platforms – are analysed through the five stages of the Product Life Cycle (PLC) model to clarify the significantly different ways in which they enable or constrain the mediation of market and technological change, resulting in distinctive patterns of market evolution. This analysis suggests that the traditional PLC model is not a general model as previously thought, but rather is a special case of market evolution mediated by closed-system integrated platforms. A new model of market evolution – an Open-System Modular Platform Life Cycle (OMPLC) – is proposed to represent the case of a market based on open-system modular platforms.

Keywords: architectural lock-in; closed systems; modular architectures; modular externalities; modular platforms; open systems; product life cycle; PLC; strategic modularity; technical modularity; technological change; market changes; mediation.

DOI: 10.1504/IJTM.2008.019380

International Journal of Technology Management, 2008 Vol.42 No.4, pp.331 - 364

Available online: 10 Jul 2008 *

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