Research summary: This article reviews structural change in the automotive sector from 1997 to 2007. We find that, following internal framing contests, Original Equipment Manufacturers (OEMs) led efforts to change their sector's architecture, starting from both strong and weak competitive positions and working with suppliers to advocate a new vision based on modularity and outsourcing. As the risks and costs of this vision became apparent, OEMs were able to reverse course and reaffirm their hierarchical control on the sector, taking advantage of structural features that weren't salient ex ante. We consider why certain OEMs initiated this status‐quo challenging change, and identify how sector structure mediated their (and suppliers') efforts to implement it. We document the complex change process, driven by agency, structure, and heterogeneity in firms' understanding of their sector's architecture. Managerial summary: We study the “industry architecture” (i.e., division of labor and profit) of the automotive sector. During the late 1990s, Original Equipment Manufacturers (OEMs) embraced a new vision, based on “Modularity + Outsourcing,” inspired by an analogy with Personal Computers (PCs). This seems puzzling since such a change was hard to implement and could have led to OEMs relinquishing strategic control of the sector. The misstep was caused by internal framing contests and the agendas and influence of suppliers, consultants, and academics. We also consider why OEMs were able to partially reverse these changes, and document the role of structural features that let them control their sector and retain value: managing the customer experience, acting as guarantors of quality, and preserving hierarchical supply chains in which they functioned as system integrators. Copyright © 2015 John Wiley & Sons, Ltd.

This paper explores the dynamics of value distribution within a sector, using data on the U.S. computer industry as an illustration. It provides exploratory quantitative evidence for the way in which conditions within the segments of a sector’s value chain affect the profitability of those segments compared with the sector as a whole. To consider how value shifts from one part of the sector (such as computer assemblers) to another (such as software and microprocessor makers), we look at how conditions within a segment (such as software developers) affect changes in the value share of that segment compared with the entire sector in terms of market capitalization. We find that the presence of what we call “kingpins”—firms with superior capabilities, modeled in our study as having superior market capitalization and as being disproportionately important in terms of research and development (R&D)—is correlated with a higher share of total sector value, suggesting that kingpins can help a segment to become a “bottleneck.” Sales concentration and the level of R&D expenditure are not always reliable predictors. Kingpins exert a positive externality on their direct competitors, yet their segments display increasing internal inequality over time, making the presence of kingpins a double-edged sword for their peers. Our findings extend recent work on industry architectures, highlighting the interconnectedness of different segments within a sector. They also provide a structure to help study the dynamics of “value migration,” which has not yet attracted much academic scrutiny.

Research summary How do entrepreneurs on a sharing economy platform (SEP) with a limit to aggregate output (capacity constraints) respond to a platform design change emphasizing buyer feedback? Not all supply‐side complementors can diversify or scale their offerings. Focusing on those who can change the former, but not the latter, we examine how entrepreneurs change their product portfolio size after the platform design changed to emphasize buyer feedback. We found that their product portfolio size decreased following the change, and more so for those with more positive feedback. While the sales increased for entrepreneurs after the change, buyer feedback deteriorated. Our results show how SEPs in emerging economies can foster entrepreneurship and elucidate the importance of nonscale‐free resources of supply‐side entrepreneurs to better understand platform dynamics. Managerial summary Do sellers change the number of products on offer when the app owner rewards sellers with high user ratings? While research has examined how sellers adjust the number of products to get high ratings, little attention has been paid to sellers with capacity constraints. This is problematic, as sellers on sharing economy apps often have a limit on the total quantity of products they can produce. Using data from a Chinese home cooked meal selling app, we show that sellers decreased the number of products they sell when the app owner began to reward high user ratings. The decrease was more pronounced for sellers with higher ratings. As a result, sales revenue increased, but user ratings decreased. Implications for practitioners and policymakers are discussed within.

Research Summary: We study the effect of firm disruptions on competitor performance in the presence of shared resources in the U.S. airline industry. While scholars have investigated both the effects of industry-wide and firmspecific disruptions, little work has examined the effect on competitors, who are increasingly reliant on interconnected resources in the digital age. Results from a series of recent information technology (IT) outages indicate that performance is materially affected by a competitor's disruption. While the disruption of a full-service carrier significantly delays flights of all airlines leveraging its hubs, the exact opposite is observed during the disruption of a low cost carrier. Further, the effect is strongly moderated by the type of airlines reacting to the disruption. Implications for managers and theory are discussed within. Managerial Summary: What happens to my operations when a competitor's operations are disrupted? While research has examined how a disrupted firm can recover, little attention has been paid to competitors, except their ability to exploit the disruption for economic gain. This is problematic, as firms increasingly leverage interconnected resources and infrastructure. We show that an airline's IT outages affect on-time performance of competitors' flights

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