A firm’s founding architecture both enables scale and forecloses whole markets.

Evidence

Thanks to modularization, Scania is able to realize significant economies of scale although it produces fewer units than some of its competitors. While the modular system is one key to Scania’s success modularization also imposes restrictions to Scania’s strategic options, making it difficult to move into certain markets and segments. … As Scania’s modularization builds on the idea that all major components are made by Scania, the company has refrained from entering the North American market. — Georg Schreyögg and Jörg Sydow, The Hidden Dynamics of Path Dependence, 506

Categorization

• SHARE: For a truck nerd or industrial-history friend: Scania skipped North America entirely because the modular system requires in-house components.