Industry architecture

Jacobides, M G (2016) Industry architecture. In: The Palgrave Encyclopedia of Strategic Management. Palgrave Macmillan, Basingstoke. ISBN 9781349948482

Abstract

The concept of industry architecture (IA) describes how labour is typically organized and structured within an industry (‘who does what’) and which firms capture value and profit as a result (‘who takes what’). It encompasses features such as the degree of vertical integration, the division of labour between firms and the ‘rules and roles’ that determine how firms interact and the business models, available to them. While IA reflects the conditions under which firms operate, it is influenced, in the medium term, by firms’ attempts to reshape those conditions to their own advantage. IA has close links with the concepts of ecosystems, platforms and global value chains, and with the field of evolutionary economics. It can also illuminate historical events such as the deregulation of financial services and subsequent financial crisis.