Modular Innovation in Mature Structures

Abstract: The field ofinterest in this study is modular innovation. This type ofinnovation replaces an old part of an existing product or adds newfunctionality to an existing product. Modular innovations areimportant to increase the performance of an existing product andretain the competitiveness of the product. The purpose of thisthesis is to suggest some explanatory factors that can influencehow and if modular innovation, which adds new functionality to anexisting product, can become adopted within a mature industry. Toachieve this purpose the analysis has been divided in two levels.The first level analyses how the modular innovation fits with theproduct architecture of the final product. The second levelanalyses how the industrial structures within the industry affectsthe possibilities for an entrant firm to establish oneself as a newsupplier. The empirical data is collected from the automotiveindustry. The study is based on in-depthinterviews.