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Architectural Innovation Theory of Entrepreneurship

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The architectural innovation theory of entrepreneurship focuses on changes in product architecture and their advantages/disadvantages for incumbents and new entrants ( Henderson and Clark, 1990 ). The bottom line of the theory for entrepreneurs is that a type of innovation called "architectural innovation", is a promising avenue for new entrant to pursue because it is difficult for incumbent to pursue. The theory starts with the basic idea that a product or service is made up of components that fit together according to some type of design called "product architecture" (Ulrich, 1995). For instance, a bus architecture uses a single point of contact for all the components to connect to. A slot architecture has a unique connector for each type of component. In a sectional architecture, components can be physically arranged in a number of different ways. Modular architectures are those which make it possible to isolate the development of components by standardizing thei