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Impact of Product Architecture on Disruptive Innovation: Case Study of Sharp Corporation and Its Acquisition by Hon Hai

This single-case study examines Sharp Corporation to uncover why sound companies fail when they confront changes in markets and technology. Although Sharp successfully established a vertically integrated production factory to produce LCD-TVs, the company ultimately failed and was acquired by Taiwan's Hon Hai. The case study shows that Sharp's fatal failures were excessive investment in its Sakai factory and improperly assessing the disruptive technological innovation presented by a "recommended module" for China smartphones. This case study shows that the change in product architecture from integral to modular triggered disruptive innovation and Sharp's rapid decline.