Mass Customization
Nov 21st, 2011 by WendyS
After reading from Chloe Kim’s blog about mass customization, it gives me many insights on this new strategy of business.
Referring to the original blog, there are two main points about customization:
- Multiple market within
- Reduce cost with flexibility
The first point indicated a new way to view and understand customer behavior – as multiple markets. This simply stated that one customer will bring other customers into the market if his/her wants were fulfilled. The second point is the key for a company to maximize their profit by minimizing their cost. By mass customization, customer need could be better addressed while lowering the cost by producing less.
This new strategy is very useful because of it allows a company to target more directly to customer needs. According to Porter’s Generic Strategies Model, a differentiation focus strategy would have a higher cost. However, mass customization actually lowers the cost because it eliminated the risk of producing products with a low demand. Dell is the best example that demonstrated the effectiveness of this strategy.