Designing a firm’s boundaries can lead to substantial strategic regeneration. But the question is, how? Moving beyond
transaction-level analysis, we consider how the design of the firm’s overall boundaries (rather than individual make-vs-buy
choices) yield strategic advantages in addition to organizational benefits. We do so through in-depth analysis of a European
textile manufacturer that disaggregated its vertical structure without changing its overall scope. We discuss how the change
in value proposition from integrated final good provider, to outsourcee delivering a series of intermediate goods and services,
yielded real benefit in a saturated market. We highlight the major strategic benefits of this vertical disaggregation, and
consider how it changed both strategic prospects and industry dynamics. We show that this new structure allowed the firm
to transform its monolithic structure into a vertically agile layout, enabling it to reconfigure the scope of its offerings to
customers and, ultimately, to use reconfigurability as a strategic tool to fend off commoditization and segregate markets to
soften the effects of competition. We identify the critical role of IT as a factor enabling the new flexible structure. We show
that, in contrast to our expectations and the literature, it is architectural technologies such as ERP systems, rather than the
technologies linking firms (such as EDI systems), that enable reconfigurable modular structures. We examine the conditions
under which such flexible vertical structures may be effective, identifying high maturity and low appropriability in our
setting. We conclude with implications for theory and practice