10.4 Upstream Influence: Regulation and Pseudo-Regulatory Influences

Regulation can be both an enabler of competitive advantage and a barrier to entry. Regulation can act to preserve an existing system architecture well past its useful life or generate an opportunity for new architectures to disrupt the market. For example, the introduction of Tier 4 Final emissions regulations for off-highway trucks, which essentially upheld stricter emissions standards, required firms to update their entire engine portfolio, but it simultaneously offered an opportunity in the market to compete anew on fuel efficiency.

The obvious impact of regulations is their implications for architecture and design, such as the mandatory inclusion of backup cameras on U.S. ...

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