To wrap the section up quickly for you, it talks about the transition from old manufacturing to modern manufacturing. The difference between the original mass production Ford style assembly line, and a new emerging model. In the new model a primary company produces the same goods using classic manufacturing techniques (Lego), but then niche companies produce specific products, where there is demand, but not enough for the primary company to produce product (BrickArms).
I wonder how well this model describes the relationship between AAA and indie games. AAA companies churn out mass produced, but popular, titles under manufacturing like conditions. Indie studios produce smaller title that smaller niche segments of the population are interesting in playing.