Exploring the Congruence of Functional Strategies and Customer Integration Strategy

To better cope with the future of competition, more and more firms tend to integrate customers into value co-creation process that requires customer-firm interaction. Also, mass customization can occur at various points along the value chain, ranging from the simple standardized build-to-to-order product, up to fully customized design one, which requires the coordination of the functional strategies. Although customer integration and functional strategies coordination are critical to a successful customerization, few studies explore the congruence between these two aspects. This paper is an attempt towards this direction. The purpose of this paper is to empirically investigate the associations between functional strategies and customer interaction as well as their impacts on firm’s competitive priorities. A multi-method approach was used to collect the data at the Chinese manufacturing industry. Based on the analysis, this study makes the contributions in three aspects: First, the study provides empirical evidence to support the argument of customer integration in operations. Second, this study found that functional strategies significantly associated with customer interaction. Third, the congruence of functional strategies coordination and customer interaction impacts significantly on firm’s competitive advantages. Firms with aligned customer integration strategy and functional strategies can achieve significantly better performance in cost, speed, flexibility and service. The empirical evidence of the paper deepens the understanding of value co-creation system and enables the practitioners to support the promise of customerization by integrating customer.