Vertical disintegration and entrepreneurial opportunities: An historic analysis of the broadcasting sector

Abstract

This paper presents a modified version of the product life cycle model in order to address how vertical disintegration emerges and how vertical disintegration provides entrepreneurial opportunities. It does this by redefining the concept of a dominant design as a set of multiple design decisions that include both alternative choices about technology and the definition of sub-problems in terms of independent modules. The degree of openness in the design rules that define the interactions between these modules determines the degree of independence for these modules and thus the level of opportunities for vertical disintegration and entrepreneurs. This paper uses historical analyses of the broadcasting sector to define these vertically disintegrated layers and the rules that determine the interactions between these layers. It uses data on the number of firms and revenues in each layer to show how the emergence of independent modules and vertical disintegration has led to entrepreneurial opportunities. © 2007 IEEE.