Diversification strategies in emerging industries: A supply network perspective

The sustainable translation of scientific and technical innovation into global products and services is key to capturing value from emerging industries. For industrial practitioners, choosing the appropriate entry mode into these industries will often determine their level of success in sharing in this value capture. It is increasingly accepted that to assess the performance of a firm in an emerging industry an understanding of its supply network is required. Thus, using supply network configuration to provide the dimensions of analysis, a focal firm's network type may be described by its tier structure, its dispersion, its unit operations and the material and information flows which link the various network actors. Additionally, supply network mapping provides insights on the relationships and governance between actors in the networks. This study examines one industrial sector which is currently the focus of global technical innovation, solar photovoltaic (PV), by analyzing its emerging supply network. A technologically differentiated market, it has several intriguing facets, such as the co-existence of multiple generations of technology each with their own applications space, multiple product platforms, and the different value chains supporting them. This investigation looks at one route into emerging industries, diversification, and how the changing nature of the value chain and supply network that underpins the transformation. Using a triangulation of case study supplemented with secondary data, this work demonstrates how diversification may be enabled by reconfiguration of the supply network structure and a fundamental shift in the positioning of the focal company in the value chain.