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The Complementarity Of Mass Customization And Electronic Commerce

Author

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  • C.-H. Sophie Lee
  • Anttesh Barua
  • Andrew Whinston

Abstract

In this technology-intensive business world, it is important to note that technology does not work alone; it only works when all other supporting elements work in concert. Two 'things', or business strategies, are complementary when the marginal contribution of one increases with the value of the other, and vice versa This paper models two business strategies, electronic commerce and mass customization, in a profit maximization model and shows that these two strategies as complementary under certain assumptions. In doing so, this paper sheds light on why many mass customization attempts failed and why electronic commerce does not bring in as high a return as expected. This paper includes three sub-models and shows the optimal price movements under each scenario.

Suggested Citation

  • C.-H. Sophie Lee & Anttesh Barua & Andrew Whinston, 2000. "The Complementarity Of Mass Customization And Electronic Commerce," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 9(2), pages 81-110.
    • Handle: RePEc:taf:ecinnt:v:9:y:2000:i:2:p:81-110
    DOI: 10.1080/10438590000000005
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    Citations

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    Cited by:

    1. Brian Squire & Steve Brown & Jeff Readman & John Bessant, 2006. "The Impact of Mass Customisation on Manufacturing Trade‐offs," Production and Operations Management, Production and Operations Management Society, vol. 15(1), pages 10-21, March.
    2. Lihra, Torsten & Buehlmann, Urs & Graf, Raoul, 2012. "Customer preferences for customized household furniture," Journal of Forest Economics, Elsevier, vol. 18(2), pages 94-112.
    3. Kurt Matzler & Daniel Stieger & Johann Füller, 2011. "Consumer Confusion in Internet-Based Mass Customization: Testing a Network of Antecedents and Consequences," Journal of Consumer Policy, Springer, vol. 34(2), pages 231-247, June.
    4. Minvielle, Etienne & Waelli, Mathias & Sicotte, Claude & Kimberly, John R., 2014. "Managing customization in health care: A framework derived from the services sector literature," Health Policy, Elsevier, vol. 117(2), pages 216-227.
    5. Prasad, Acklesh & Heales, Jon, 2010. "On IT and business value in developing countries: A complementarities-based approach," International Journal of Accounting Information Systems, Elsevier, vol. 11(4), pages 314-335.
    6. Gu, Qiannong & Jitpaipoon, Thawatchai & Yang, Jie, 2017. "The impact of information integration on financial performance: A knowledge-based view," International Journal of Production Economics, Elsevier, vol. 191(C), pages 221-232.

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