Wavelengths
Unraveling ASML's sources of innovation
 
This is the original dissertation manuscript.
 
In the field of strategy and innovation management, understanding the mechanisms through which firms navigate and thrive in the turbulent environments of high-tech markets remains an intriguing question. This thesis delves into the journey of lithography equipment maker ASML and unravels the intricate play between entrepreneurial decision-making, strategic flexibility, technology management, and innovation.
 
ASML faced several severe crises in its existence, and after each one of these crises ASML jumped ahead in market share and financial performance at the expense of its competitors. Over the last ten years ASML’s revenue grew on average by 18,4% per year and in that same period the average yearly net profit yielded 24,5% while its overall market share in the lithography industry is over 80%, with a 100% share in the most advanced technologies. Since these data show that ASML is a highly successful company, it is interesting to learn which elements contributed to this success.
 
What I aim to explain in this study is an answer to the following overarching research question: ‘What are ASML’s innovative capabilities, and how have these contributed to the companies’ sustained competitive advantage in a highly volatile market?’ I applied a qualitative approach engaging in a longitudinal single case study. I use a mix of phenomenal and abductive methods to make sense of both the archival, financial and interview data.
 
This dissertation shows that ASML’s sustained competitive advantage, defined through profitability, growth, and resilience, is intricately linked to its innovative capabilities. The company has built a foundation on organizational structure, human capital, and an adaptable culture, which together form the capabilities that have been meticulously designed and continuously evolved to provide flexible and adequate responses to
the ongoing market and technological changes. Organizing on your toes, always on the move and being agile to respond is critical in the high-tech, knowledge-intensive environment of ASML.