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The changing boundaries of system companies

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  • Bonaccorsi, Andrea
  • Pammolli, Fabio
  • Tani, Simone

Abstract

While project marketing and systems selling are mainly concerned with market relations of companies organized on a project basis, it is important to conceptualize the interactions between market conditions and long term technology problems of these firms. The paper deals with strategic problems of system companies. By system companies the authors mean those large, multi-technology, multi-business firms that are typically active in systemic industries in most industrialized countries. In these industries market demand has some peculiar features: discontinuity, heterogeneity and customization, long and complex buying process, variable specification capability of customers. On the supply side, system companies produce unique or small series products, on a customized basis, by using a large array of technologies. System integration is the distinctive strategic capability of these companies. It is argued that system integration involves the management of a peculiar kind of uncertainty. The long run strategic objective of system companies is to maintain the global control of the technological dynamics of the system. However, there are many possible changes in the boundaries of product systems that may threat the viability of control. To gain strategic control, system companies have to manipulate simultaneously market and technology leverages. The paper offers a rich conceptual discussion of these problems.

Suggested Citation

  • Bonaccorsi, Andrea & Pammolli, Fabio & Tani, Simone, 1996. "The changing boundaries of system companies," International Business Review, Elsevier, vol. 5(6), pages 539-560, December.
    • Handle: RePEc:eee:iburev:v:5:y:1996:i:6:p:539-560
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    References listed on IDEAS

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    Cited by:

    1. Takey, Silvia Mayumi & Carvalho, Marly M., 2016. "Fuzzy front end of systemic innovations: A conceptual framework based on a systematic literature review," Technological Forecasting and Social Change, Elsevier, vol. 111(C), pages 97-109.
    2. Bonaccorsi, Andrea & Giuri, Paola, 2000. "When shakeout doesn't occur: The evolution of the turboprop engine industry," Research Policy, Elsevier, vol. 29(7-8), pages 847-870, August.
    3. Segelod , Esbjörn & Jordan, Gary, 2002. "The Use and Importance of External Sources of Knowledge in the Software Development Process," FE rapport 2002-391, University of Gothenburg, Department of Business Administration.
    4. Dahlgren, J. & Söderlund, J., 2001. "Managing inter-firm industrial projects -- on pacing and matching hierarchies," International Business Review, Elsevier, vol. 10(3), pages 305-322, June.

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