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MassCustomizationatAdidas: ThreeStrategicCapabilitiestoImplementMassCustomization

FrankPiller,EvalotteLindgensandFrankSteiner,RWTHAachenUniversity (Authorcontact:tim.rwthaachen.de)
Theideaofmasscustomizationistoturncustomersheterogeneousneedsintoanopportunitytocreate value,challengingtheonesizefitsallassumptionoftraditionalmassproduction.Inthispaper,we explorethecharacteristicsofsuccessfulmasscustomizationimplementationattheexampleofthe footwearindustry,usingthemethodofasinglecasestudyofmiadidas,themasscustomization initiativeofoneofthelargestglobalsportbrands.Wewillstartwithabriefoverviewofthemass customizationconceptandintroduceaframeworkofthreestrategiccapabilitiesthatmakemass customizationwork.Wewillthendiscussthesituationoftheathleticfootwearindustryanddifferent approachestomasscustomizationinthisindustry.Themainpartofthischapterwillfocusonthe developmentofmiadidas,thecentralcustomizationofferingofAdidas.Thepaperendswithareflection ofthedevelopmentofmasscustomizationatAdidas.

1Introduction Intodayshighlycompetitivebusinessenvironment,activitiesforservingcustomershavetobe performedbothefficientlyandeffectivelytheyhavetobeorganizedaroundacustomer centricsupplyanddemandchain(Piller&Tseng2010).Sincetheearly1990s,masscustomiza tionhasemergedasanideaforachievingpreciselythisobjective.InaccordancewithJoseph Pine(1993)wedefinemasscustomizationas"developing,producing,marketing,anddelivering affordablegoodsandserviceswithenoughvarietyandcustomizationthatnearlyeveryone findsexactlywhattheywant."Inotherwords,thegoalistoprovidecustomerswhattheywant, whentheywantit.Hence,companiesofferingmasscustomizationarebecomingcustomer centricenterprises(Tseng&Piller2003),organizingalloftheirvaluecreationactivitiesaround interactionswithindividualcustomers. However,toapplythisapparentlysimplestatementinpracticeisquitecomplex.Asabusiness paradigm,masscustomizationprovidesanattractivebusinesspropositiontoaddvalueby directlyaddressingcustomerneedsandinthemeantimeutilizingresourcesefficientlywithout

Electronic copy available at: http://ssrn.com/abstract=1994981

incurringexcessivecost.Thisisparticularlyimportantatatimewherecompetitionisnolonger justbasedonpriceandconformanceofdimensionalquality.Whenthesubjectofmass customizationisraised,thesuccessfulbusinessmodelofthecomputersupplierDellisoften citedasoneofthemostimpressiveexamples.ThegrowthandsuccessofDellisbasedonthis firmsabilitytoproducecustomcomputersondemand,meetingpreciselytheneedsofeach individualcustomerandproducingtheseitemsonlyafteranorderhasbeenplaced(andpaid for),withnofinishedgoodsinventoryriskatall.However,beyondDell,therearemanyother examplesofcompaniesthathaveemployedmasscustomizationsuccessfully(Salvadoretal., 2009,seewww.configuratordatabase.comforabroadlistingofexamples). Aswewearshoeseveryday,mostofushavequiteapreciseideaofaperfectshoe.Butin reality,thereoftenisatradeoffintermsoffit,form,andfunction.Asaresult,thefootwear sectorhasbeenamongtheindustriesthathaveembracedmasscustomizationquiteearly,with mixedsuccess.Considerthefollowingexamples: Inthemid1990s,CustomFootwasoneofthefirstcompaniestoembracemasscustom izationforthefootwearindustry.BasedinWestport,Connecticut,customerscouldor dershoesthatpromisedaperfectfit.Theirfeetweremeasuredin14differentways electronically.OrderswerethentransmittedtooneofadozenItalianfactories.There, customorderstooktheirplaceontheassemblylinealongsidemassproducedshoes. Customerscouldpickfrom150stylesinsizesfromwomen's4AAAAtomen's16EEEEE, atpricesrangingfrom$100to$250(Wong1996).Whileinitsannouncementsthecom pany'sfounderpromisedtoincreasethenumberofstoresfromthreein1996to100by theendof1997,thecompanywentoutofbusinessin1997.Thereasonforthisfailure wasnotalackofcustomerdemand,butalackofstableprocessesinfulfilment.First, therewasaproblemwithdifferingcultures.TheItalianfactorieswereusedtoworking inbatchmode,versusindividualproduction,whichcausedsomeproblems.Forexam ple,thefactoryworkersinItalywantedtotaketheusualfourweeksoffinAugust,when customersintheUSwantedtheirshoes.Butthesinglebiggestproblemwasthatthe companycouldn'treliablymeasureafootanddeterminewhatsizeoptionswouldbest fitthatfoot.Thesystemwasnotstableenoughtoproducereplicableresults. Morethan10yearslater,USsneakerbrandKedstookadifferentapproach.In2009,it launchedacustomfootwearoffering,calledKedsstudio.com.Thefocushereistheaes theticdesignoftheshoes,andproductsretailforaboutUS$4060.Userscanuploadany designorpictureontheirshoe,whichthenisprintedonthecanvas,lasercut,andas sembledtoasneaker.Shoesaremanufacturedwithanadvanceddigitalprintingtech

Electronic copy available at: http://ssrn.com/abstract=1994981

nologythatoffersgreatvarietyinhighquality.ManufacturingtakesplaceinChinawith in24to48hours,allowingfororderleadtimesforUSconsumersofonetotwoweeks, dependingupontheshippingmethodselected.Tobuilditsmasscustomizationoffering, Kedcouldrelyonanewbreedofmasscustomizationoutsourcingservices.Itcontracted CaliforniabasedZazzleInc.tonotjustorganizeitssupplychainandcustommanufactur inginAsia,butalsotoconnectKedswithcreativeconsumersonline.48hoursafterthe launch,over18,000designshadbeenpublishedonZazzle.com.Today,millionsofde signshavebeencreated.Whilenotalldesignsarebeingtransferredintoanactualor der,withinafewweeksKedscreatedmoredesignswithmasscustomizationthanitsin housedesignersintheentire100yearsofthecompany'sexistence. Selve,aLondonandMunichbasedmanufacturerofwomenscustomshoes,isafine exampleofacompanythatinteractswellwithitscustomersbothinthetraditionalstore andonline.Selveenablesitscustomerstocreatetheirownshoesbyselectingfromava rietyofmaterialsanddesigns,inadditiontoatrulycustomshoefit,basedona3Dscan ofacustomersfeet.Trainedconsultantsprovideadviceinthecompanysstores;the onlineshopoffersreorders.ShoesareallmadetoorderinaspecializedfactoryinChina andaredeliveredinabouttwoweeks.Customersgetthisdedicatedserviceforacost betweenEuro200and400,notinexpensivebutstillaffordableformanyconsumers comparedtothepricelevelofatraditionalshoemaker(startingat1000Euroand more).Initstenyearsofexistence,Selvecouldbuildagrowingcustomerbase,andafter improvingitsmanufacturingandsupplychainprocesses,alsoscaleupoutputandsales. In2010,Barcelona,Spain,basedbrandMUNICHlaunchedalineofcustomsportsshoe (munichmyway.com)thatarenotjustcharacterizedbyawidevarietyofdesigns,butby alocalmanufacturingapproachthatstrivestorelocatemanufacturingbacktoEurope. AllcustomshoesaremadeinasmallfactoryinBarcelona,allowingthecompanytoship shoesquitefast,butalsotoadjuststylesandfabricchoicesrapidly.Despitethehigher manufacturingcost,shoesretailforabout120Euro,notmuchmorethanthestandard shoesofthebrand.

Whatdotheseexampleshaveincommon?Regardlessofdifferentproductcategories,price points,andfulfillmentsystems,theyallhaveturnedcustomersheterogeneousneedsintoan opportunitytocreatevalue,ratherthanregardingheterogeneityasaproblemthathastobe minimized,challengingtheonesizefitsallassumptionoftraditionalmassproduction.The ideaofthischapteristoexplorethecharacteristicsofsuccessfulmasscustomizationinthe

footwearindustry,usingthemethodofasinglecasestudy.Wewilldiscussthemasscustomiza tioninitiativeofAdidasAG,oneofthelargestglobalsportbrands. Theremainingofthischapterisorganizedasfollows:Wewillstartwithabriefoverviewofthe masscustomizationconceptandintroduceaframeworkofthreestrategiccapabilitiesthat makemasscustomizationwork.Wewillthendiscussthesituationoftheathleticfootwear industryanddifferentapproachestomasscustomizationinthisindustry.Themainpartofthis chapterwillfocusonthedevelopmentofmiadidas,thecentralcustomizationofferingof Adidas.ThechapterendswithareflectionofthedevelopmentofmasscustomizationatAdidas. 2MassCustomization:DefinitionandStrategicCapabilities Fromastrategicmanagementperspective,masscustomizationisadifferentiationstrategy. ReferringtoChamberlins(1962)theoryofmonopolisticcompetition,customersgainthe incrementofutilityofacustomizedgoodthatbetterfitstheirneedsthanthebeststandardized productattainablewould.Thelargertheheterogeneityofallcustomerspreferences,thelarger isthisgaininutility(Kaplanetal.,2007).Davis,whoinitiallycoinedthetermin1987,refersto masscustomizationwhenthesamelargenumberofcustomerscanbereachedasinmass marketsoftheindustrialeconomy,andsimultaneously[]betreatedindividuallyasinthe customizedmarketsofpreindustrialeconomies(Davis1987:169).Pine(1993:9)popularized thisconceptanddefinedmasscustomizationasprovidingtremendousvarietyandindividual customization,atpricescomparabletostandardgoodsandservicestoenabletheproduction ofproductsandservicewithenoughvarietyandcustomizationthatnearlyeveryonefinds exactlywhattheywant.AmorepragmaticdefinitionwasintroducedbyTsengandJiao(2001) whosuggestedthatmasscustomizationcorrespondstothetechnologiesandsystemsto delivergoodsandservicesthatmeetindividualcustomersneedswithnearmassproduction efficiency(TsengandJiao,2001:658). Morerecently,masscustomizationhasbeendescribedasasetoforganizationalcapabilities thatcanenrichtheportfolioofcapabilitiesoftheirorganizations(Salvadoretal.2009;Piller& Tseng2010).Companiesthatprofitfromheterogeneitiesintheircustomerbasesuccessfully havebuiltcompetencesaroundasetofcorecapabilities.Whilespecificanswersonthenature andcharacteristicsofthesecapabilitiesareclearlydependentonindustrycontextorproduct characteristics,threefundamentalgroupsofcapabilitiesformtoabilityofafirmtomass customize:Solutionspacedevelopment,robustprocessdesign,andchoicenavigation(the derivationofthesecapabilitiesbuildsonworkbySalvadoretal.,2008;Salvadoretal.,2009):

SolutionSpaceDevelopment.Firstandforemost,acompanyseekingtoadoptmasscustomiza tionhastobeabletounderstandtheidiosyncraticneedsofitscustomers.Thisisincontrastto theapproachofamassproducer,wherethecompanyfocusesonidentifyingcentraltenden ciesamongitscustomersneeds,andtargetsthemwithalimitednumberofstandardprod ucts.Conversely,amasscustomizerhastoidentifytheproductattributesalongwhichcustom erneedsdivergethemost.Oncethisisunderstood,thefirmknowswhatisrequiredtoproperly covertheneedsofitscustomers.Consequently,itcandrawupthesocalledsolutionspace, clearlydefiningwhatitisgoingtoofferandwhatitisnot. RobustProcessDesign.Asecondcriticalrequirementformasscustomizationisrelatedtothe relativeperformanceofthesupplychain.Specifically,itiscrucialthattheincreasedvariability incustomersrequirementsdoesnotleadtosignificantdeteriorationinthefirmsoperations andsupplychain(Pineetal.,1993).Thisdemandsarobustsupplychaindesigndefinedasthe capabilitytoreuseorrecombineexistingorganizationalandsupplychainresourcestofulfill differentiatedcustomers'needs.Withrobustprocessdesigncustomizedsolutionscanbe deliveredwithnearmassproductionefficiencyandreliability. ChoiceNavigation.Finally,thefirmmustbeabletosupportcustomersinidentifyingtheirown problemsandsolutions,whileminimizingcomplexityandburdenofchoice.Whenacustomeris exposedtotoomanychoices,thecognitivecostofevaluationcaneasilyoutweightheincreased utilityfromhavingmorechoices(HuffmanandKahn,1998;Piller,2005).Assuch,offeringmore productchoicescaneasilypromptcustomerstopostponeorsuspendtheirbuyingdecisions. Therefore,thethirdrequirementistheorganizationalcapabilitytosimplifythenavigationof thecompanysproductassortmentfromthecustomers'perspective. Themethodsbehindthesecapabilitiesareoftennotnew.Someofthemhavebeenaroundfor manyyears.However,successfulmasscustomizationdemandsthecombinationofthese methodsintocapabilitiesinameaningfulandintegratedway.Todiscusshowthiscapability frameworkcanbeappliedinthefootwearindustry,wewillusethecaseofoneofthecore offeringsofcustomizationinthisindustry,themasscustomizationprogramofAdidas.

3MassCustomizationatAdidas 3.1Companyoverview GermanybasedAdidasAGisthesecondlargestglobalsupplierofsportgoods,withasales volumeofnearly12billionEurosacrossallbrands.Amongthesesales,about50%accountfor sportshoes.Therestismadewithapparelandaccessories.Thecompanyemploysabout42.500 membersofstaff.Thecorebrandadidashasnetsalesof8.7billionEurosin2010.Theproduc tionvolumeofAdidasshoesisabout200millionperyear.Thecompanyitselftodayisapure brandowner,focusingondevelopingandsellingitsproducts,whilemanufacturingisdoneby independentsuppliers. ThehistoryofAdidascanbetracedbacktothe1920swhenAdolf"Adi"Dasslerandhisbrother beganmakingshoeswiththebasicmaterialsavailableaftertheFirstWorldWar.Atfirst, slippersweremadeusingoldtirestoproducethesole.Laterthoseshoeswerechangedinto soccershoesandgymnasticshoesbyaddingcleatsornailonstuds(Seifert2006).Thereason forthisdevelopmentwasasimpleideatoprovideeveryathletewiththebestpossibleequip ment.Thefirsttime,DasslershoeswereshowcasedduringtheAmsterdamOlympicsin1928. ThemajorbreakthroughwasachievedintheBerlinOlympicsin1936whenagoldmedalist woretheirshoes.Onlyoneyearlater,theDasslerbrothersalreadymanufacturedshoesfor11 differentkindsofsport. However,in1948bothbrothersarguedonhowtoproceedwiththedevelopmentoftheir business,whichledtoAdolfDasslersfoundationofAdidaswhereashisbrotherRudolph establishedthePumasportscompany.Fromthatpointoftime,Adidaswasfocusingon performancesportshoes.Itsportfoliowascomplementedbysoccerballsin1963andapparel in1967.Bythen,Adidaswasboomingandnearly80%ofallmedalwinningathleteswere equippedbyDasslerscompany. Newcompetitors,suchasNikeorReebokin1979,startedtoenterthemarketfocusingonlow quality,fashionableleisureweartargetingteenagers.Thoseturbulenttimeswereaccompanied bythefoundersdeathwhichleadtoorganizationalandmanagementchanges.Afterfinancial troubles,investorRobertLouisDreyfuswasappointedchairmanoftheexecutiveboardandled thecompanytoanamazingturnaroundbyfocusingonmarketneedsandestablishingastrong brandimage(Moseretal.,2007).ThissuccessfulleadershipwasfollowedbyHerbertHainer, CEOandChairmanoftheExecutiveboardofAdidassince2001.Inthelastyears,Adidas positioneditselfasnumbertwooftheworldslargestsportmanufacturers,apositionbeing reinforcedbyitsacquisitionofReebokin2006,aformercompetitor.Todaythecompanyissplit

intothreemajordivisionswhichtargetdifferentcustomertypes:sportperformance,sport heritage,andsportstyle. 3.2Industrybackground:Reasonstoentermasscustomization Theglobalsportsshoemarketischaracterizedbyahighlevelofrivalrybetweentheexisting suppliers.AcquisitionsliketheoneofReebokbyAdidasAGin2005orsupplierUmbrobyNike in2007leadtopermanentmovementsofmarketshares.Furthermore,lowentrancebarriers allownew,mostlyspecializedsupplierstoenterthemarket,eveniftheyareonlyregionally competitorsoftheglobalplayers.Mostcompanieshaveoutsourcedtheirproductionfacilities tolowwagecountriesintheFarEast.Simultaneously,shortenedinnovationcycleshaveleaded tohighercostsinresearchanddevelopmentaswellaslesstimeforproductandqualitytesting beforeaproductentersthemarket.Fromtheconsumerperspective,theinternethascreated anenvironmentwherecustomersareconfrontedwithahugebandwidthofproductsaswellas betterinformationtocomparethese(specializedcategoryretailerslikeZalando,anonline footwearshop,areamongthemostsuccessfulexamplesofecommerce).Inmostcases,a changetoanotherbrandevokesnocosts.Asaresult,qualityaspectsaswellasapsychological brandcommitmentandaperfectfittocustomers'needsarebecomingkeyenablersofa successfulstrategyinthesportsshoeindustry. Atthesametime,theindustrymovedintoamodelofhighvarietyandchoice.Between1980 and2000,thenumberofstylesavailableinthesportgoodsmarketincreasedbymorethan 3000percent(Cox&Alm1999).Oneofthegreatstrengthsofanysuccessfulfootwearcompany isitsabilitytocreateacompellingvarietyofofferingsthatexciteconsumers.Buttherecanbe toomuchofagoodthing,asAdidas'scompetitorNikehasobserved:Eachquarter,Nikesells about13,000differentstylesoffootwearandapparel.Manyadditionalstylesmakeitpartway throughtheprocess,butdon'tendupinthefinallinethatgoestomarket.Buteachoneof thesetensofthousandsofstylesdrivescosts;costsfordesign,development,sampling, transportation,storageandsales.Forfootwear,95%ofNike'srevenuecomesfromabout35% ofthestyles;forapparelfromabout40%(Piller2007). Costsofsamplestoshowcasethisvarietytoretailersadduptomorethan$100million.In addition,anenormoussupplychaincomplexityhastobehandledtoplan,distribute,andsell thisvariety.Still,retailoutletsfacehighoverstocks,anincreasingfashionrisk,andthenecessity toprovideoftenlargediscountsinordertogetridofunwantedproducts,nottomentionlost salescausedbyproductswhichhaveperformedbetterthanexpectedandthataretherefore notavailableinadequatequantitiesorsizes.Facingthesechallenges,Adidasdecidedattheend ofthe1990sto"gobacktotheroots"ofitslonghistoryandtointroducefootwearthatisbeing

producedonlyondemandaccordingtotheexactinputofaparticularconsumer.Themotiva tiontoentermasscustomizationclearlywastofindawaytoreducethehighcomplexityofa forecastbasedsystemofhighvariety. 3.3Adidasmasscustomizationofferings Adidasproductdevelopmentteamenvisionedalreadyin1999thatofferingcustommanufac turedproductsaresuitedtocounterthetrendofgrowingheterogeneityofcustomerneeds (Moseratal.,2007).Aninternalpilotwaslaunchedin2000,calledmiadidas,toevaluatethe feasibilityofacustomizedproductlinewithinAdidas.Theobjectivesnarroweddownthe projecttoemphasizeacustomizedproductandtotestthedemandforcustomizedproducts. Pilotstudiesweresuccessful,andtheofferingwascontinuouslyextendedtoitsrecentform. Today,Adidashasseveralproductlinesforcustomizedgoods: miadidas:InthecoreofAdidas'customizationofferingsisitsoriginalmasscustomiza tionprogram,miadidas(Berger&Piller2003;Seifert2006).Theprogramisfocusedon performanceshoesandcombinesfit(measurements),function(climatecontrol,insole), andform(colorcombination).Theprogramstartedin2001aftertwoyearsofplanning andtesting.Today,miadidasisofferedbothonlineandinselectedflagshipstores.Cus tomshoesareavailableacrossanumberofcategories,includingsoccer,running,bas ketball,andtennis.miadidashasbeenpositionedasapromisetoconsumerstoachieve thesameleveloffootwearastopathleteswouldgetaspartoftheircustomsponsorship packagebuildingonthecompany'sheritageofbeingaclosepartnerofsportsmenand women. miteam:ThissectionofAdidasistargetingsportsteams,whereacoach,forexample, cancustomizesportswearforallteammembers.Themiteamportfoliodoesnotonlyof fercustomizedshoes,butalsocustomizableapparelandaccessoriesinadditionto shoes. mioriginals:ThisofferingresemblestheprogramsofKeds,NikeorConverseandallows consumerstocreatetheirownstyle,basedontheselectionofstyleoptionsforpre definedcolorfieldsofashoe.Whilethepreviousofferingsfocusontheperformance aspectoftheproduct,mioriginalsclearyispositionedasafashionproduct. micoach:AninterestingadditiontotheAdidascustomizationportfolioismicoach,offer ingusersapersonalizedonlinetrainingprogram.Customerscanprovideinputontheir

trainingobjectivesandlifestyleha t abits,andre eceiveapersonalized(h however,au utomati callygenera c ated)sugges stionforat trainingprog gramtorea achthisobje ective.Thes sitealso allowsusers a stomonitortheirgoal achievement.Similart tomiadidas, ,micoachhasbeen positionint p themarketasproviding gaverageusersthesam metrainingandcoaching knowhowasitisavaila k abletotopa athletes. 4miadi idas:CapabilitiesandC Challenges Sinceth heinitiallaunchofmiad didas,itsfulfillmentpro ocesshasbe eenimprove edcontinuo ously. Figure1 1showsmia adidas'value echaintoda ay.Theproc cessstartsw withaconfig gurationpro ocess betweentheconsu umerandAd didasviasomeformofconsumeri interface.A Acustomero order cessedbyAdidasordermanagementsystem.Thisproce esstriggersa a thenhastobeproc ivemanufac cturingproc cesswithinacorrespon ndingprodu uctionfacilit ty.Theprocessends respecti withthe edistributio onofthefin nalproductt totheendc consumeraf ftermanufa acturinghas sbeen complet tedandthe eproductha asbeenship ppedtothecustomers'order.Inth hefollowing g,this sectionwilldiscussthemiadidasprocessinlargerdetail.Tostructureourarguments,w wewill usethethreemass scustomizat tioncapabilitiesintrodu ucedbefore e.Wewillfirstdiscusst the pmentofthe esolutionspaceatmia adidas,then nthechallen ngetoestab blishstableprocess develop es,andfinallythew wayhowchoicenavigationworksinthiscase. .

Figure1:Themiadidas sfulfillmentp process

4.1SolutionSpaceDevelopmentatmiadidas Todefinethesolutionspaceacompanyhastoidentifythoseneedswherecustomersare differentandwheretheycareaboutthesedifferences.Matchingtheoptionsrepresentedby thesolutionspacewiththeneedsofthetargetedmarketsegmentisamajorsuccessfactorof masscustomization(Hvametal.2008).Thecorerequirementatthisstageistoaccess"cus tomerneedinformation,thatis,informationaboutpreferences,needs,desires,satisfaction, motives,etc.ofthecustomersandusersoftheproductorserviceoffering.Needinformation buildsonanindepthunderstandingandappreciationofthecustomersrequirements,opera tionsandsystems. Formiadidas,thisprocesshasbeenrathersimple.First,thedecisionwasmadetobuildthe customizationactivitiesonexistinginlineshoes.Thisallowedforefficienciesinthefactory (tooling,productionknowledge,inventoryoffabricsandcomponents),butprovidedapointof referencetoconsumersontheadditionalvalueofacustomizedproductsincomparisontoa standardshoe.Ingeneral,thetopofthelinevariantswereselectedforeachcategory. Secondly,themiadidasteamengagedinconventionalmarketresearchtechniquestogather datafromrepresentativecustomersaboutthescopeoftheoptionsinaproductthatshouldbe offeredcustomizable.However,asconsumerknowledgeaboutthesystemhadbeenverylow atthelaunchoftheprogram,Adidasdecidedtoengageinpilotingandfullscaleprototypingto getdeeperinsightfrompotentialcustomers.Participantswererecruitedduringsportsevents, andfocusedonpeopleactivelydoingsportsinaseriousway(e.g.,membersofrunningor soccerclubs,participantsatamarathonrace,etc.)Thesepilotsrevealedsomeinteresting insight: 73%ofthetestershadaverygoodfeelingwiththeboots. Testerswouldbewillingtopaybetween10to30%morethantheregularpricefora customizedsoccershoe. 100%demandforanAdidascustomizationserviceinthefuture. 80%understandthatthedeliverytimewilltakelonger(21days).

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Askedforthecriteriaweremostimportanttothecustomer,fitwasmentionedmost oftenbyfar(68%ofcustomerinterestedincustomsoccershoes,75%forrunningshoes, respectively),followedbyfunction(14%and20%),anddesign(12%and5%).

Asaresult,thedecisionwasmadetopositionmiadidasasaperformanceproductwiththe dimensionsmifit(measurements),miperformance(functionalityandcomponents),and midesign(coloroptions).Untiltoday,miadidasistheonlymasscustomizationproductbyan establishedsportsbrandthatoffersthesethreeoptions(allcompetitors,especiallyNikeID,only offerdesigncustomization).Overthepastfewyears,however,thedesignoptionbecamemore andmoreimportantfortworeasons:First,toscaleupthevolumeoftheprogram,afocushas beenplacedononlinesales.Those,however,areonlyeasilypossibleforthedesignoption. Here,Adidaswasfacingatradeoffbetweenkeepingitsoriginalpointofdifferentiation(fit, form,andfunction)andtheopportunitiesfromusingapureonlinechannel.Secondly,man agementhadthefeelingtoservethe"createyourown"trendinabetterway,focusingonthe young,creativeconsumerthatisusedtocustomizeherFacebookpageandcellphonecover. Thistrendhasbecomethefocusofthemioriginalsprogram. 4.2RobustProcessDesignatmiadidas Acoreideaofmasscustomizationistoensurethatanincreasedvariabilityincustomers requirementswillnotsignificantlyimpairthefirmsoperationsandsupplychain(Pineetal. 1993).Thiscanbeachievedthroughrobustprocessdesignthecapabilitytoreuseorrecom bineexistingorganizationalandsupplychainresourcestodelivercustomizedsolutionswith highefficiencyandreliability.Hence,asuccessfulmasscustomizationsystemischaracterized bystablebutflexible,responsiveprocessesthatprovideadynamicflowofproducts(Pine1995; Tuetal.2001;Salvadoretal.2004;Badurdeen&Masel2007).Valuecreationwithinrobust processesisthemajordifferentiationofmasscustomizationversusconventional(craft) customization.Traditional(craft)customizers(likemakingacustomshoeforatopathletein theconventionalsystemifAdidas)reinventnotonlytheirproducts,butalsotheirprocessesfor eachindividualcustomer.Masscustomizersusestableprocessestodeliverhighvarietygoods (Pineetal.1993),whichallowsthemtoachievenearmassproductionefficiency,butitalso impliesthatthecustomizationoptionsaresomehowlimited.Customersarebeingserved withinalistofpredefinedoptionsorcomponents,thecompany'ssolutionspace. Thelatterprincipleisillustratedperfectlywiththefittingoptionofmiadidas.Traditionally,a customfitofashoeisdeliveredbymeasuringacustomer'sfeet,creatingacustomlastrepre sentingtheseshapes,andthenproducingtheshoearoundthecustomlast.Inamasscustomi

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zationsetupoffootwear,however,inmostinstancesalibraryofpredefinedlastsisbeingused (Boer&Dulio2007).Thislibraryisgenerallylargerthanthestandardsizingassortment(inthe caseofAdidas,itrepresentstheentiresizerange,withthreewidthspersize),andalsoallows toselectadifferentsizefortheleftandtherightfoot.Basedonthemeasurementdataofthe customers,theirfeetarematchedtoanexistinglast.Whilesuchasystemdoesnotallowthe "perfect"fitforallpossibleshapes,itis"goodenough"topresentastrongimprovement comparedtostandardsizesavailableinaregularoutlet.Matchingacustomerorderwithan existinglibraryoflastsalsohastwofurtheradvantages:Moldsandformsrequiredforthe productionofoutsolescanbereduced,whichisamajorcostadvantage.Finally,usingore definedsizesalsoallowsforstableprocessesduringthesalesstage.Customersareenabledto eventrythefitoftheir"custom"shoesbyusingasamplesizeinthestore.Thissystemim provesqualityofordertakingenormouslyandtransfersthesubjectiveanderrorproneprocess offittingintoarelativelystableandsmoothactivity. Tomanufacturetheshoes,Adidasusesthesamesuppliersforitscustomshoesthatalso producethecorrespondinginlineproductsinhugequantities.Adidaswasabletoachievethis agreementbyusingitsstrongpositioninthismarket.Inaddition,forthesuppliersflexible manufacturingalsobecamearathereasyoptionasthosecompaniesingeneralhaverather largesampleroomcapacities,withanoutputof500,000pairsayear.Formanystartupsinthe fieldoffootwearcustomizationfindingasuitablesupplierbecamealonganddemanding challenge(astheexampleofCustomFoothasshown).AglobalplayersuchasAdidas,onthe otherhand,isabletobringallmanufacturingactivitiestogetherandreapthebenefitsof combiningmasscustomizationandmassmanufacturing. Assoonasacustomerorderhasbeensubmittedtotheordermanagementsystem,the manufacturingoftheindividualizedproducthastobetriggered.Thisisanenormouslycomplex process(Figure2),asmiadidasshoeshavetobemanufacturedalongsidetheinlineproductsin theAdidasmultiplantnetwork.AdidasmanufacturesshoesinChina,Indonesia,Vietnam, ThailandandTurkey,andthemanufacturingprocessisdifferentineveryplant:Forexample, thenumberoflocalsuppliersthatisintegratedintherespectivesupplychainvariesfrom factorytofactory.Thus,miadidasachievedalargeimprovementconcerningtheleverageof existingsystemswhenthesupplychainmanagementformiadidaswasfullyautomatedin2006. Anorderingsystemwasimplementedwhichautomaticallyallocatesorderstoproduction companies.Basedoninformationfromplanninganddevelopmentprocesses,theorder managementsystemautomaticallyidentifiesthemanufacturingfacilitythatoffersthebest suitablecombinationofavailableresourcesandcapacities.However,theadministrationofsuch anautomatedsupplychainfacesvariousproblems:Aninterorganizationalinformationsystem isrequiredtocopewithalldifferentinterfacesofthenetworkpartners.Furthermore,all

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ationthatisrelevantforthedecisio onmakingp processeshastobegat theredandmade informa availableinanetwo orkwideER RPsystem.N Naturally,al llthisdatah hastobeup pdatedcons stantly.

Figure2:Themiadidas sbusinessinfo ormationproc cess(Source:A AdidasAG)

Hence,inanoptimalworld,de esigningstableprocessesformasscustomizat tionwoulds startona ieldwiththe edevelopm mentofnewproductsandmanufac cturinglines saswellasnew greenfi planning gresources stoenablea anautomate edprocessingofcustom merorders. .Suchagreenfield approac chhoweveroftenisdiff ficultforan nestablished dcompany: :Atthestar rtofthepro ogram, volumes sarenotsu ufficienteno oughtojusti ifyallthein nvestment.M Moreimpor rtantly,also othe knowled dgeandexp periencehowtobuilds suchasystemisnotava ailablebuth hastobeac cquiredby aproces ssfororgan nizationalex xperimentat tionandlea arning.Henc ceinourob bservation,m most masscu ustomization nprogramsarebasedo ontheprinc cipleoftrialanderrora andslowgrowth. Alsowit thinmiadida as,salesvol lumesarenotsufficientuntiltoday ytojustifya aseparatem manufac turinglineorevendedicatedf factory.This sforcesAdid dastoprovi ideamassp productionsystem eetsthespecificneedso ofmasscus stomizedpro oducts.Forexample,A Adidasnowhasto thatme dealwit thdifferencesininvent torylevels:F Forthestan ndardinlineproductsA Adidasrelies son finished dgoodsinve entories.Forcustomize edmiadidasproducts,o ontheother rhand,ther reisno finished dgoodsinve entory,butm manufactur ringdemand dsalargerp poolofrawmaterialtocoverall

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variancefromtheoptions.Givenhowevertherelativevalueofmaterialscomparedtothevalue ofthefinalproduct,andAdidas'marketpowertowardsitssuppliers,thematerialinventory problemisrelativelylow. Alargerchallengeandcostdriverisdistribution.Formiadidasproducts,distributionhastobe organizeddifferently,ascustomizedproductsatAdidasaremanufacturedafterthecustomer hasplacedanorder.Thatmeans,contrarytobuyingapairofshoesataretailer,miadidas customerscannottaketheirshoeshomedirectlyafterthepurchase.Instead,customershave towaitfortheordertobetransferredtothemanufacturingfacility,forthemanufacturingof theshoesandfortheirdistribution,beforetheproductbecomesavailabletothem.For miadidasproductsthisleadtimeshouldnotexceed21days.Inconsequence,miadidasisusing expresscourierservicestodistributethefinishedgoodstotheendconsumers.Fromthe manufacturingfacilitiesinChina,Indonesia,Vietnam,ThailandandTurkeythefinishedproducts areflowntohubsintheUS,EuropeandAsia.FortheUSmarketmiadidasusesFedExservices, whereasDHLservicesEuropeandAsia.Theuseofexpresscourierservicesoffersanadditional benefittomiadidascustomers:Thecourierservicesofferatrackingsystemforalltransported goodswhichallowscustomersalargervisibilityoftheirorderstatus.Ontheotherhand, distributionviacourierservicesisrelativelyexpensive.Indeed,itisthelargestadditionalcost factorofmiadidascomparedtotheproductionanddistributionofinlineshoes.Whileatthe currentstateofthesystemarelocationofmanufacturingfromAsiatoEuropeisoutofconsid eration,someanalystsarealreadypredictingamovefromAsiabacktoEuropeortheUS (Gowdner2011).Theadditionalproductioncostmaybecounterbalancedbythesavingsintime andcostofairdelivery. 4.3ChoiceNavigationatmiadidas Lastly,amasscustomizermustsupportcustomersinidentifyingtheirownneedsandcreating solutionswhileminimizingcomplexityandtheburdenofchoice.Thetraditionalmeasurefor navigatingthecustomer'schoiceinamasscustomizationsystemhasbeenproductconfigura tionsystems,alsoreferredtoas"codesigntoolkits"(FrankeandPiller,2003;FrankeandPiller, 2004),configurators,choiceboards,orcustomerdesignsystems(SalvadorandForza,2007; Hvametal.,2008).Theyareresponsibleforguidingtheuserthroughtheelicitationprocess. Wheneverthetermconfiguratororconfigurationsystemisquotedintheliterature,forthe mostpart,itisusedinatechnicalsense,usuallyaddressingasoftwaretool.Thesuccessofsuch aninteractionsystem,however,isbynomeansdefinedsolelybyitstechnologicalcapabilities butalsobyitsintegrationintothesalesenvironment,itsabilitytoallowforlearning,itsability toprovideexperienceandprocesssatisfaction,anditsintegrationintothebrandconcept.Tools foruserintegrationinamasscustomizationsystemcontainmuchmorethanarithmetic

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algorithmsforcombiningmodularcomponents.Inatoolkit,differentvariantsarerepresented, visualized,assessed,andpricedwithanaccompanyinglearningbydoingprocessfortheuser. Thecoreideaistoengagecustomersintofastcycle,trialanderrorlearningprocesses(von Hippel,1998).Thankstothismechanism,customerscanengageinmultiplesequentialexperi mentstotestthematchbetweentheavailableoptionsandtheirneeds. Inthemiadidassystem,therearethreepossiblewaysforcustomerstoplaceanorderat miadidas,eachoftheseorderchannelsusingadifferentcustomerinterface:Adidasflagship stores,events,andanonlineconfigurator.Allthreesaleschannelsuseaconfigurationsystem whichhelpstovisualizetheproductsandwhichconnectsthepointofsalewiththeorder managementsystem. Retailstores.ThefirstoptionistheuseofspecificAdidasownedflagshipstores.Inthiscase permanentinstallationsatdedicatedretailoutletsarechosen.Customerscanvisitthesestores andgothroughthecodesignprocesswiththehelpoftrainedsalespersonnel.Thisapproach offersonemajoradvantage:Inthebrickandmortarstoresspecialequipmentisavailableand moredetailedcustomerdatacanbecollected,sothatcustomerscanmakebetteruseof miadidascustomizationoffersintermsoffitandfunctionality. Events.Thesecondsaleschannelemphasizesspecialeventsatselectedretailersorwholesale markets.Adidasisabletopromotethoseeventstotheirretailpartnersbyofferingthemthe potentialtodifferentiatethemselvesfromtheirlocalcompetitorsbyimprovingtheimageof theirstores.Inthiscasetheretailertakesfullresponsibilityforthemarketingoftheeventand alsotakescareofthebillingprocess(Bergeretal.2005).Adidasonlyprovidesthetrainedsales personnelfortheinteractionwiththecustomersforthedurationoftheeventwhichisusually twotofourdays.Thisformofeventsalescanalsotakeplaceinthecontextofmajorsporting events.InthiscaseAdidasisfullyresponsibleforthewholeprocess,butsucheventsofferthe additionalbenefitofreachingthecoretargetgroupofmiadidas. Online.ThethirdoptionforplacinganorderistheAdidasecommerceplatform.Thischannelis thelatestadditiontothesaleschannelsofmiadidasandwillprobablybecomethemost importantoneinthefuture.Intermsofcustomizationoftheappearanceoftheshoes,the onlineconfigurationprocessismostlyidenticaltotheprocessofplacinganorderoffline. However,theonlineprocesscannotofferalloptionsconcerningthefitandfunctionalityofthe shoes.Forreorders,however,thisissuecanbeneglectedbuys:Customerscanplaceafirst orderinanAdidasstoreandreusetheirrespectivecustomerdataforrepeatordersonline. Thatway,masscustomizationcanbeanexcellentwaytogenerateconstantsalesbasedonre orders.Ontheotherhand,therebuysituationisnotonlyachanceformiadidas,butitmay

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alsoturnouttobeastrongbarrier:Duetothedifferentdistributionchannels,islandsolutions havebeenproduced.Alldistributionpartnersmaynothaveaccesstothesamepoolofdata. Forexample,itispossibletopurchasecustomizedshoesinbrick&mortarstoresandusethe samedatainecommercetoreordertheshoesorconfigurenewones.Butthisdoesnotyet workviceversa.Thisisstillanissuewhichneedsefforttofacilitatebetterintegration. Theinteractionbetweenamanufacturerandthecustomerthatisunderlyingacodesign processfurtherofferspossibilitiesforbuildingloyaltyandlastingcustomerrelationships.Once acustomerhassuccessfullypurchasedanindividualitem,theknowledgeacquiredbythe manufacturerrepresentsaconsiderablebarrieragainstanypotentialswitchingtoother suppliers.Reorderingbecomesmucheasierforthecustomers.Themorecustomerstellthe vendorabouttheirlikesanddislikesduringtheintegrationprocess,thebetteristhechanceof aproductbeingcreatedthatmeetsthecustomersexactneedsatthefirsttry.Afterdeliveryof thecustomizedproduct,feedbackfromthecustomerenhancesAdidassknowledgeofthat customer.Thecompanycandrawondetailedinformationaboutthecustomerforthenextsale, ensuringthattheserviceprovidedbecomesquicker,simpler,andmorefocused.Theinfor mationstatusisincreasedandmorefinelytunedwitheachadditionalsale.Thisdataisalso usedtoproposesubsequentpurchasesautomatically,oncethelifeofthetrainingshoesisover (forAdidascustomerswhoexerciseintensively,thiscan,infact,bethecaseeveryfewmonths). WhenAdidasentersalearningrelationshipwithitscustomers,itincreasestherevenuesfrom eachcustomer,because,inadditiontotheactualproductbenefits,itsimplifiesthepurchasing decision,sothatthecustomerkeepscomingback.Whywouldacustomerswitchtoacompeti torevenonewhocoulddeliveracomparablecustomizedproductifAdidasalreadyhasall theinformationnecessaryforsupplyingtheproduct?Anewsupplierwouldneedtorepeatthe initialprocessofgatheringdatafromthecustomer.Moreover,thecustomerhasnowlearned howselfintegrationintotheprocesscansuccessfullyresultinthecreationofaproduct.By aggregatinginformationfromasegmentofindividualcustomers,Adidasalsogainsvaluable marketresearchknowledge.Asaresult,newproductsforthemassmarketsegmentcanbe plannedmoreefficiently,andmarketresearchismoreeffective,becauseofunfilteredaccessto dataonmarkettrendsandcustomersneeds.Thisisofspecialbenefittothosecompaniesthat unitelargescalemaketostockproductionwithtailoredservices.Masscustomizationcanthus becomeanenablingstrategyforhigherefficiencyofamassproductionsystem.Thislearning relationshipoffersnewcostsavingpotentialbasedonthebetteraccesstoknowledgeabout theneedsanddemandsofthecustomerbase(Kotha1995;Pilleretal.2004;Squireetal.2004). Benefitsofgettingaccesstothisknowledgeareasfollows:

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Reducedoreliminatedneedforforecastingproductdemand, Reducedoreliminatedinventorylevelsoffinishedgoods, Reducedproductreturns,and Preventinglostsalesifcustomerscannotfindaproductinastorethatfitstheirre quirementsand,thus,allocatethepurchasingbudgettoanotheritem.

Choicenavigation,however,doesnotjustrefertoatechnicalprocessofselectingfromoptions orusingalgorithmstoprovidethefit.Offeringchoicetocustomersinameaningfulwayalso canbecomeawayfornewprofitopportunities.Recentresearchhasshownthatupto50%of theadditionalwillingnesstopayforcustomized(consumer)productscanbeexplainedbythe positiveperceptionofthecodesignprocessitself(FrankeandPiller2004;Schreier2006; FrankeandSchreier2010;Merleetal.2010).Productcodesignsbycustomersmayalso providesymbolic(intrinsicandsocial)benefits,resultingfromtheactualprocessofcodesign ratherthanitsoutcome. Adidastriedtoaddressthisaspectofchoicenavigationbyvariousiterationsofitsonlinetool, everytimeimprovingtheusercocreationexperience.Thelargestdemonstrationofthiseffect, however,hasbeentheopeningofanewkindofperformancestorethatfeaturesavery differentsetupandsalesexperience.In2006,the"miinnovationcenter(miC)"openedaspart oftheParisflagshipstoreofAdidasatChampsElysees.ThemICoffersconsumerscustomiza tionintechnology,style,anddesign,usingmanyinnovativetechnologiessuchasaconfigurator, laserandinfraredtechnologies,commandsgeneratedbygesturetranslation,avirtualmirror,a digital3Duniverseandradiofrequencyidentification(Kamenev2006).Untiltoday,however, thisconcepthasnotbeenrolledouttoalargerextendandcanbeconsideredasaunique experiment. 4.4Alternativestomasscustomizedfootwearproducts Independentlyformmiadidas,Adidasintroducedtwofurtherradicallynewproductdesigns whichallowforcustomizationintheactualproduct.Wewanttodiscussthesetwoalternative approachesattheendofthissectiontooutlinefurtherwaysofenablingcustomizationfroma consumerperspective.Thecompany'sunderlyingrationalisagaintoreduceriskanduncertain tywithregardtoproductvariants,buttodosowithoutthecomplexityofcustomordertaking, ondemandmanufacturing,andsinglepiecedistribution.Thekeyoftheseapproachesare

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adaptable,intelligentproducts(astrategythatdominatescustomizationinmanymarkets, includingsmartphones,laptops,matrasses,orofficefurniture). Thefirstoftheseproducts,dubbedAdidas1,isarunningshoethatshallprovideahugerange ofcushioningoptionsinoneproduct(forrunningshoes,cushioningisalargedriverofvariety asusersdemanddifferentdegreesofstiffness).Toembedflexibility,theshoeisequippedwith asensor,asystemtoadjustthecushioning,andamicroprocessortocontroltheprocess.When theshoe'sheelstrikestheground,themagneticsensormeasurestheamountofcompression initsmidsoleandthemicroprocessorcalculateswhethertheshoeistoosoftortoofirm.Then, duringthesecondstheshoeisairborne,atinymotorshortensorlengthensacableattachedto aplasticcushioningelement,makingitmorerigidorpliable.Eachshoealsohasasmalluser interfacethatallowsformanualadjustmentsoftheproduct,allowinguserstotrimthecom puter'sdecisiontopersonaltaste.AccordingtoAdidas,theshoe'srangeofcushioningoptions correspondstoatleastfivepreviousfixedvariantsofoneshoe,reducingtheplanninguncer taintybythisdimension. Adidas'secondadaptableproduct,Tunit,isamodularsystemthatallowstheusertomixand matchthevariouspartsofasoccerbootduringtheusagestage.Thebootsaresoldbroken downtothreecomponents:upper,chassis(insole)andstuds.Allcomponentsareinterchange able,transferringasoleproductintoaproductsystem.Introducedforthe2006Worldcup,the productispresentlyofferedinavarietyof10uppers,3chassisand3differentsetsofstuds (uppersandchassisareofferedinthestandardsoccersizerangeof16sizes).TheTunitsystem changestheconventionalwayofplanningandlaunchingadesignvariantevenmorethantwo otherconceptsofpostponingintotheuser:First,theunderlyingformpostponementofthe TunitsystemallowsAdidasformuchmoreflexibleplanning.Thepresentscopeofmodules allowsconfiguring90differentvariants.Forecastshavetobeperformedjustonthelevelofthe tenuppers(colors,fabrics),whilestudsandinsolesarestablemodulesovermanyseasons. Conventionally,Adidaswouldhaveofferedacomparablesoccerbootin28to36different variants(colorinsolestudcombinations),allsubjecttoadetailedforecastingprocess.Inthe Tunitsystem,thisriskydecisionofthefinalproductconfigurationispostponedintotheuser domain.Second,theprovisionofspecialretailvariantsorlimitededitionsbecomesmuchmore efficient.Anewvariantnowjustdemandsanadditionalupper.Forexample,presentlyAdidasis alsoofferingitsstandardsoccerbootsina"styleversion"intendedforstreetuse.Despitetheir similarlytotheregularversion,thesestreetwearproductsformanindependentproductline. Withanextensionintherangeofoutsolesandstuds,Adidascouldeliminatetheentire"style" lineandincludeitintotheTunitsystem.Third,thesystemprovidesvaluetouserswhodon't havetopurchasemultiplepairsofshoeswhenplayingondifferentgrounds.ForAdidas,onthe

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otherhand,theopportunityto"upgrade"shoesandselladditionalcomponentsisanewprofit opportunity(withmuchhighermargins). 5Discussion Thedevelopmentofmiadidasrevealsalonglearningpathandtrialanderrorprocessfor implementingandscalingupamasscustomizationoffering.Masscustomizationwasconsid eredasonepossiblesolutiontocopewiththehighvarietyandincreasingcomplexityofthe inlinebusiness.Inthefirstyears,miadidas'realfunctioninthecorporatestrategy,however, wasdifferent.Itprimarilywasasupportingfunctionforthebrandimage,enhancingalsothe positioningofotherproductsoftheperformancecategory.Besidesthat,thecompanycould createanimageofitselfasaninnovativeplayerbyofferingauniquebrandexperienceand improvingrelationshipswithitscustomers.However,servingasamarketingtoolorpilotisnot asustainablepositionforabusinessunitinaglobalenterprise. Therefore,inthelastyearsthemiadidasbusinessunithasbeenreorganizedandhasbeen integratedmoredeeplyintotheexistingprocessesandroutines.Activitieslikespecialretail eventsbecomelesssignificantwhereaspermanentlocationsandtheonlinechannelbecome moreimportant(Moseretal.2007).Mostimportantly,miadidascanbeconsideredasa knowledgerichactivitythatproducesinformationtoimprovetheinlinebusiness.Theinline (standard)assortmentbenefitsfrommoreaccurateforecastsofcustomerneedsandtrendsas wellasmoreappealingmodels.Atthesametime,achievementswithregardtodesign(e.g. modularproductarchitectures),manufacturingtechnology(flexibleprinting),logistics(fast distributionsystem,directsales),andonlinesales(ecommerceconfigurator)servedaslearning labsfortheentirecompany.Severalnewtechnologiesthatfirsthavebeenintroducedtoenable miadidasarenowsupportingefficiencyintheinlinesystem. Fromourobservationsofmiadidas'development,weconcludethatimplementingmass customizationand,thus,buildingitsunderlyingthreestrategiccapabilitiesisbyfarnoeasyor straightforwardtask.Masscustomizationdemandsanewcustomercompanyrelationshipfor allmembersoftheorganization.Thisprovedtobemuchmoredifficultthanexpected.Forthe majorityofemployeesatAdidas,the"customer"stillisthesalesorganization,perhapsthe retailpartner,butinmostinstancesnotthefinalconsumer.Masscustomization,however, demandssuchacustomercentricperspective. Anindicationofthischallengemaybethefactthatthereorderingandlearningprocess (outlinedinthesectiononchoicenavigation)hasnotbeenestablishedinmostcountries.While rathersimplefromatechnologicalperspective,andalsointuitivefromamarketingpointof

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view,enablingadirectrelationshipwithendconsumershasproventobemuchmoredifficult thanexpected.Itisthementalgapandthedominancefromtheexistingmassproduction thinkingthatispreventingitsexecution.Atthesametime,thecustomizationunitwithinAdidas hastocontinuouslyproveitsvaluesetandsurviveaspartofatraditionalmassproducer.Until today,theleadershipofthisunitmastersthischallengeverywellandpositionedmiadidasasan experimentallearningspacefortheentirecompany(Walcher&Piller2006).Butthecase clearlydemonstratesthatevenforanestablishedandfinanciallysuccessfulcorporationsuchas Adidas,implementingmasscustomizationisnoteasy,despiteasuitablemarketandgreat customerfeedback.Successfulmasscustomizationdemandsbuildingauniquesetofstrategic capabilities,andchangingthecorporatementalitytobecometrulycustomercentric.Butonce mastered,itisexactlythesechallengesthatprovidethecompetitiveadvantageofmass customization.
Acknowledgements:Thedocumentationofthiscaseonlycouldbepossibleduetothecontinuousinteraction betweenthefirstauthorandthemiadidasteamoverthelastdecade.TheauthorsthankespeciallyChristoph Berger,Directorandinitiatoroftheoriginalmiadidasprogram,andAlisonPage,hissuccessorandpresentDirector ofCustomization,fortheircontinuoussupportandexchangeofideas.Forreasonsofprivacy,allinformationforthis casehasbeentakenfrompublicinformation,companypresentations,pressstatements,andpreviouspublications. ThediscussionsectionissolelytheopinionoftheauthorsanddoesnotreflectanofficialopinionofAdidas.

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