Abstract
Rapid technological changes and shortening product life cycles are fundamentally altering the nature of competition in many industries by diffusing competitive advantage. The dominant paradigm, 'mass-production,' is being challenged by the emerging paradigm, 'mass customization.' Mass customization (MC) means production of goods and services for a (relatively) large market which exactly meets the needs of every individual customer with regard to certain product characteristics (differentiation option) at costs roughly corresponding to those of standard mass produced goods. Mass customization enhances profitability through a synergy of increasing customer-perceived value and reducing the costs of production and logistics. Within the knowledge domain of mass customization, this paper focuses on three interrelated strategies: co-creation, modularization and postponement. Also outlined is a road map for building competitive advantage through mass customization based on involvement of customers during early stages of product development and application of postponement by building block identification and product platform development.
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