Technology Acquisition Strategy: A Latecomer's Perspective on Integrating Component Suppliers With System Integrators

Abstract

Having unique market structures divided between a few buyers (military or airliners) and a few oligopolistic producers, as well as requiring several millions of components, the aerospace industry has the typical feature of a complex structure. Due to the complexity of operational procedures, strict safety regulations, and reliability requirements, close cooperation between manufacturers and suppliers is critical in developing new products based on the operational plan that incorporates customers’ needs. Thus, it is necessary to have a systematic planning and technology acquisition procedure that considers these various aspects. However, research has paid little attention to strategic technology learning and acquisition procedures in detail and practical guidelines through which system integrators and suppliers strategically cooperate in sharing strategic development plans. In this regard, we analyzed the case of “T-50,” the first indigenous supersonic advanced trainer introduced by Korea Aerospace Industries in 2005, to investigate the associations between system integration and components in development phases. Not only did we examine how the structures of technology dependence and operations in R&D phases manifest but also identified discrepancies between system integrators and suppliers. Finally, we provided strategic actions for latecomers to effectively acquire core technologies in accordance with both technology absorptive capability and the types of product architecture. This article helps firms to build both strategic technology planning and managerial capabilities in the complex product system industry. The proposed framework provides a detailed strategic planning process in the development phase and includes technology acquisition and R&D project plans between system integrators and suppliers for creating new products.