Advertisement

Managing Product Variety

  • Karl Ulrich
  • Taylor Randall
  • Marshall Fisher
  • David Reibstein
Part of the International Series in Operations Research & Management Science book series (ISOR, volume 10)

Abstract

Cannondale, a producer of premium mountain bikes, offers 22 models ranging in price from $500 to $3000. VooDoo, a competitor, offers 672. Each mountain bike from National is offered in 104 different colors. A bike from Specialized is offered in only one. Why are the variety practices of these four companies so different? Given differences in their product lines, are the companies’ operations also dramatically different? Can such diverse strategies coexist in the marketplace? Using field data from four companies in the mountain bicycle industry—Cannondale, Specialized, VooDoo, and National—we identify and analyze managerial decisions relating to product variety. We assert that successful firms must make coherent decisions in six strategic areas: (1) the dimensions of variety offered to the market, (2) the nature of the customer interface and distribution channel, (3) the degree of vertical integration, (4) the process technology, (5) the location of the decouple point in the supply chain, and (6) the product architecture. Many of the differences among these companies arise from different sets of decisions, perhaps equally coherent, in these six areas.

Key words

product variety product strategy operations strategy bicycle industry 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Davis, T., and Sasser, M. (1995), “Postponing Product Differentiation,” Mechanical Engineering, November, 105–107.Google Scholar
  2. Day, George S.(1990), Market-Driven Strategy, The Free Press, New York.Google Scholar
  3. Fisher, M. (1993), “National Bicycle Industrial Corporation,” Wharton School Case, available from authors.Google Scholar
  4. Fisher, M. (1997), “What is the Right Supply Chain for Your Product?” Harvard Business Review, March/April, 105–116.Google Scholar
  5. Green, P., and Krieger, A. (1996), “Individualized Hybrid Models for Conjoint Analysis,” Management Science, June, 850–867.Google Scholar
  6. Lancaster, K. (1979), Variety, Equity and Efficiency, Columbia University Press: New York.Google Scholar
  7. Lee, H. (1996), “Effective Inventory and Service Management Through Product and Process Redesign,” Operations Research, Jan/Feb, 151–159.Google Scholar
  8. Lee, H., and Tang, C. (1997) “Modelling the Costs and Benefits of Delayed Product Differentiation,” Management Science, January, 40–53.Google Scholar
  9. Lee, H., and Tang, C. (1995), “Variability Reduction Through Operations Reversal in Supply Chain Re-Engineering,” Working Paper, Stanford University.Google Scholar
  10. Porter, M. (1980) Competitive Strategy: Techniques for Analyzing Industries and Competitors, The Free Press: New YorkGoogle Scholar
  11. Porter, M. (1985) Competitive Advantage, The Free Press: New York.CrossRefGoogle Scholar
  12. Prahalad, C., and Hamel, G. (1990), “The Core Competence of the Corporation,” Harvard Business Review, May/June, 79–91.Google Scholar
  13. Robertson, D. and K. Ulrich, “Platform Product Development,” to appear in Sloan Management Review, 1998.Google Scholar
  14. Stalk, G, Evans, P., and Shulman, L. (1992), “Competing on Capabilities: The New Rules of Corporate Strategy,” Harvard Business Review, March/April, 57–69.Google Scholar
  15. Mishina, K. (1991), “Tombow Pencil Co. Ltd.,” Harvard Business School Case 692011, Harvard Business School Publishing, Boston.Google Scholar
  16. Ulrich, K., and Eppinger, S. (1995) Product Design and Development, McGraw-Hill, New York.Google Scholar
  17. Ulrich, K. (1995), “The Role of Product Architecture in the Manufacturing Firm,” Research Policy, 24, 419–440.CrossRefGoogle Scholar
  18. Upton, D. (1994), “The Management of Manufacturing Flexibility,” California Management Review, Winter, 73–89.Google Scholar
  19. Utterback, J. (1994), Mastering the Dynamics of Innovation, Harvard Business School Press.Google Scholar

Copyright information

© Springer Science+Business Media New York 1998

Authors and Affiliations

  • Karl Ulrich
    • 1
  • Taylor Randall
    • 1
  • Marshall Fisher
    • 1
  • David Reibstein
    • 1
  1. 1.The Wharton SchoolUniversity of PennsylvaniaUSA

Personalised recommendations