Advanced manufacturing and new directions for competitive strategy

Abstract

This study examines the potential contributions that advanced manufacturing can make to the competitive strategy of the firm. Porter's framework for describing generic competitive strategies in terms of low-cost leadership, differentiation, and focus is a useful way to begin looking at this linkage, and several cases of successful implementation of advanced manufacturing in U.S. companies are examined in this light. A closer examination of these cases and a deeper understanding of how companies are actually competing, however, lead to some new directions proposed for further thinking regarding advanced manufacturing and competitive strategy: i.e., dangers of differentiation and the advantages of pursuing low-cost leadership at increasingly higher levels of customer acceptability; opportunities available in focusing on customer valued complexity, which takes advantage of the strengths of computer and information technology; multiple niche competition as an addition to Porter's competitive scope situations, the potential for economies of scope, the synergy between economies of scale and scope, and the simultaneous achievement of both low cost and differentiation; and finally advanced manufacturing competing as a service business.