Modular and architectural innovation in loosely coupled networks: matching customer requirements, product architecture, and supplier networks

Collaborative innovation projects that involve suppliers, customers, and sometimes even competitors can be a challenging undertaking. Nonetheless, specialization and organizational loose coupling makes companies increasingly dependent upon resources that are only externally available. This study focuses on how companies can improve the success of collaborative product innovation projects of a modular or architectural nature. An in-depth case study and a survey study on 664 collaborative innovation networks from four different industries in the U.S. are used to examine the problems and challenges that companies encounter in collaborative innovation. Furthermore these studies show what strategies can be used to solve these issues. The empirical findings reveal that the degree of organizational coupling among innovation network members together with the availability of product design rules are good predictors of the commercial success of architectural and modular product innovations. These findings are summarized in a new innovation typology that provides several counterintuitive, but practical implications for companies who are in the process of developing modular products or services.