Make-buy decisions in the face of radical innovations.

Some research in the area of make-buy decisions for new technologies suggests that it is a good idea for a company to pursue a fairly rigorous “make” policy in the early days of a potentially disruptive innovation. Other studies prescribe exactly the opposite, promoting instead a “buy” strategy. This lack of convergence points to the fact that the scheme of categorization used to analyze make-buy decisions in the face of radical innovations is not yet complete. Accordingly, this thesis builds upon prior work on make-buy decisions and disruptive technologies, and constructs two new hypotheses by introducing evidence from research in the areas of (1) supplier relationships and (2) industry clockspeed. Using a three-phase research design involving both case studies and a survey, this research shows that close relationships between customer firms and principal suppliers that are built on trust and personal relationships do not play an important long-term role in the development of radical innovations. Thus, while previous research in this area underlines the value of these relationships during the day-to-day operations of a business, this evidence draws into question whether they are helpful in the face of a radical innovation. The results also show that an industry’s clockspeed has no significant bearing on the success or failure of any particular make-buy strategy for a radical innovation. Because many of the prescriptive frameworks and strategic formulas put forward in the literature for make-buy decisions involving radical innovations are based on observations from fast clockspeed industries, this conclusion effectively broadens the potential applicability of prior research in this area.

Name dc:type.qualificationname

Doctor of Philosophy (PhD)

Level dc:type.qualificationlevel

Doctoral

Grantor dc:publisher.institution

University of Cambridge

Year dc:date.issued

2004

Author dc:creator

• Perrons, Robert Kirby

Licence

• https://www.repository.cam.ac.uk/bitstreams/7af97bb5-657c-4056-8ed3-ffa666fa296f/download
• https://www.rioxx.net/licenses/all-rights-reserved/

Language dc:language

eng

DOI dc:identifier.doi

https://doi.org/10.17863/CAM.13988

OAI identifier oai:identifier

oai:www.repository.cam.ac.uk:1810/236598