Blockchain and Incumbent Manufacturing Value Chains Applicability and Adoption Use case: Ekornes, Norway
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Technology innovations are one of the most fundamental forces shaping today’s increasingly digitized economy. This study focuses on blockchain, as an instance of radically disruptive innovations, and its impact on incumbent manufacturing value chains. In fact, incumbents often struggle with successfully managing radical innovation, as their processes and business models can be optimized to work best with incremental innovation. Hence, this study aims to explore both the applicability and adoption of blockchain technology within incumbent manufacturing value chain. To fulfill its purpose, this study adopts a qualitative use case methodology, where Norway’s largest furniture manufacturing company serves as a unit of analysis. Furthermore, data is collected using several methods, where literature is analyzed, twenty one interviews are conducted and five months long participant observation activities are carried out. This study thus makes the following contributions. First, a blockchain applicability evaluation framework is developed, so as it can be used to assess whether blockchain is the right solution for a particular business use case. Subsequently, the Ekornes value chain is reconstructed and analyzed in light of the consolidated supply-demand value chain theory. The goal of this exercise was to identify Ekornes business use cases which could be solved with blockchain. The evaluation framework developed within this study was leveraged to perform such an assessment. Finally, the organizational structures and behavior exhibited by Ekornes as an incumbent managing radical innovation, was collected and analyzed. The study concludes that blockchain can indeed improve manufacturing value chains, by coordinating their supply and demand processes. Furthermore, the role of open innovation is highlighted as essential in enabling incumbents to properly respond to blockchain. Finally, the study discusses how the distributed architecture of blockchain challenges the executive decision making process among the different incumbents/teams collaborating on the same blockchain project. The study closes with an overview of the possible implications of such a work, and how future research building upon it might look like.