Modular Value Chains mean that more specialized value delivery systems can be crafted without running into scale disadvantages. It also means that one-size-fits-all value chains that churn out everything will rapidly lose their competitiveness.
Scale considerations often forces vertically integrated businesses to produce everything with the same “delivery machine”. Commodity as well as high end, feature rich as well as basic, customized as well as standard, etcetera. This was fine as long as all competitors had to try to make such configurations work. It is rapidly becoming much less fine as new business configurations abandon the vertically integrated straight-jacket by capitalizing on growing value chain fragmentation to configure much more specialized value chains.

Read more: “The End of the Village Store”  EA – End Of Village Store 2 – Martin Handschuh, Sandra Niewiem & Gillis J. Jonk – A.T. Kearney Executive Agenda, Volume X, Number 2, 2007.
Reprinted in Strategy and Leadership as “The battle of the value chains: new specialized versus old hybrids” – Gillis Jonk, Martin Handschuh, Sandra Niewiem, Strategy & Leadership Journal Volume 36, issue 2, 2008, Emerald Group Publishing Limited.
Reprinted in “Crafting & Executing Strategy: Text and Readings” – Thompson & Strickland, 2009 edition, McGraw-Hill