Product Competitive Advantage and Product Architecture - Value Creation and Value Capture in the Digital Camera Industry -

With a focus on the digital camera industry, which of all IT devices Japan has high industry competitive advantage, we discuss what product strategy did companies employ to create and capture value as the market developed, and how product architecture has changed. To meet the different needs of customers, the digital camera industry is made up of two different vectors of successive and destructive technology which each take either a modular or integrated approach to product architecure. It is an industry where the opposing industrial constructs of vertical integration and horizontal specialization are intermixed. Furthermore, the de-integration that has occured for the supply of for core modules such as CCDs and the industry reliance on a few specialized companies shows how competitors are dividing into three camps adopting one of three strategies: vertical integration, horizontal specialization or core module supply.