Abstract
The aim of this research is to increase the understanding of the decision process concerning the introduction of new product variants and its effects on sustained profitability. Although more variety improves the potential for generating increased revenues, there are potential adverse effects, resulting from increased complexity. This paper argues that product variant decisions need to consider not only internal, but also external drivers. The qualitative research is based on a series of semi-structured interviews with ten business units of leading German and Swiss companies in the manufacturing and engineering sector. The results indicate that drivers impacting variant decisions arise from three clusters: customer requirements, the major cluster driving variant proliferation; competitive situation, determined by competitors’ behaviour, market forces and opportunities; modularisation/standardisation, offering the potential to delivery variety while limiting cost impacts. One major conclusion is, while managers are aware of potential adverse variety effects they still expect positive overall benefits.
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