Industrial network: Providing specifically adapted products for customers
Summary :
Table of Contents
- Introduction
- Implication of standardization-differentiation
- The standardization-differentiation challenge
- Conclusion
- Bibliography
Abstract
The economies of scale, defined as the reduction in cost per unit resulting from increased production realized through operational efficiencies, constitute one of the key goals for firms to improve their competitiveness. But this productive model seems to be in the same time contradictory to the individual and specific customer relationships that firms try to follow. Indeed, involved in an industrial network, they have to take up the challenge and find a balance between economies and standardization on one hand and adapted products and customized relationships on the other hand. How could they achieve this goal and what are the implications of this opposition on their activity links? The following development, based on Håkansson and Snehota's model in "Developing Relationships in Business Networks" (1995) and on Richardson's analyze in "The organization of industry" (1972), tries first to demonstrate how activity links have consequences on the division of labor and how firms have to deal with a large sense of activity.
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