As industries first begin to gain real traction with customers, a predictable story unfolds. Companies chase after their first customers through offering whatever the buyer needs to close the deal. They put together a full solution to the customer's unscratched itch, leading to what Harvard Professor Clayton Christensen has called an integrated industry architecture. For example, the leading Chinese solar energy firm Yingli Solar prides itself on vertical integration from polysilicon through to a completed module. This sort of integration allows an early mover to provide a high quality and consistent solution to potential buyers.
Alas, an industry's growth brings changes. The initial quality hiccups common in the industry's nascent stages typically fade away, and specialists using proprietary technology, scale seconomies, assets from a parent company (e.g. unused factory capacity, a salesforce, brand, etc.), or other resources tend to build presence in particular links of an industry's "value chain" that leads from raw inputs through to final sales and service. A company may provide the world's finest integrated offering, but many customers will start to prefer the lower-cost alternatives made possible by the modular industry architecture that takes root during this period.