Mass customization. Development of competitive strategies by applying the concept of Absorptive Capacity

Diploma Thesis from the year 2007 in the subject Business economics - Trade and Distribution, grade: 1,3, Leipzig Graduate School of Management, language: English, abstract: Today's business environment is changing rapidly, with product variety increasing and the customization of products growing. Companies have to react to these developments by adopting strategies which allow a closer reaction to customers' individual needs as well as an increasing operational efficiency in internal processes. Mass customization is a concept that meets this challenge with offering customized goods at nearly mass production efficiency. However, recently the phrase of 'mass customization' has been the subject of much hype and became a buzzword. In 2005, the management consulting company Bain & Company has investigated that mass customization is already one of the 25 most popular management tools. Thus it seems obvious that within the last years the number of companies introducing own mass customization projects has been significantly increasing.6 Especially in the sport shoes industry the term produces a lively interest and can be seen as a trend: Nike, Adidas and Reebok are running a mass customization initiative today. Also Puma, as the fourth major brand in global sportswear market, recently introduced its 'Mongolian Shoe BBQ' called project, enabling customers to design their own shoes in the internet and selected retail stores. By having a deeper look at all these companies it becomes evident, that mass customization is frequently implemented ineffectual and rarely part of a strategic plan. Instead, the technique is often only used as a marketing gimmick, 'neglecting the needs and possibilities of dealing with single customer orders.' The fact conversely, that mass customization offers much more potential than its utilization as a marketing instrument, is not only proven by theoretical literature. Also several successful practical examples - sometimes from entirely different industries - demonstrate the wide range of opportunities for pursuing a mass customization strategy.