The Pitfalls of Subsystem Integration: When Less Is More
研究了技术公司推出新子系统时，子系统预装功能多少对终端产品制造商采用决策和利润分配的影响，发现过度整合可能损害采用者差异化能力，反而不利于技术公司获利。
In various industries end-product manufacturers acquire core subsystems from upstream technology provider firms and focus primarily on efficient end-product integration. We examine the strategic interactions between a technology firm that introduces a new subsystem and the respective end-product manufacturers (“integrators”). We analyze how the fraction of end-product functionalities prepackaged into the subsystem impacts the optimal introduction strategy and the relative value appropriation power across the industries. Offering a subsystem that performs many end-product functions has a dual effect on the provider's profits. On the positive side, the provider extracts a higher ease-of-use rent from the integrators because of the easier/cheaper integration. On the negative side, such subsystems may curtail the adopters' ability for competitive differentiation and render adoption less valuable. We discuss the role of subsystem functionality in value appropriation in technology markets, and we highlight the perils of subsystem overintegration. This paper was accepted by Kamalini Ramdas, entrepreneurship and innovation.