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Modular Strategies: B2B Technology and Architectural Knowledge
Business-to-business information technology systems are becoming increasingly important in firm supply chains. Uses the concept of modularity to clarify the strategic implications of B2B technology. There are two generic B2B strategies: modularization, which allows a firm to rent out its internal capabilities to others in its industry, and architectural entrepreneurship, which alters the supply chain by allowing a central coordinating firm to facilitate arrangements that trust issues and information asymmetries had previously made impossible. Which modular strategy is appropriate depends on the role the focal firm plays in the supply chain and its supply chain indispensability. Only firms with deep architectural knowledge can take full advantage of these modular strategies.