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Title: Considerations for avoiding commoditisation in the automotive industry - analysis of factors that enhance customisation

Authors: Hirotoshi Uehara; Atsunari Kobayashi; Keisuke Uenishi; Junji Ikeda; Hiroyuki Nagano; Shuichi Ishida

Addresses: Graduate School of Engineering, Osaka University, 2-1,Yamadaoka, Suita, Osaka, Japan ' Kubota Corporation, 2-47, Shikitsuhigashi 1-Chome, Naniwa-ku, Osaka, Japan ' Graduate School of Engineering, Osaka University, 2-1,Yamadaoka, Suita, Osaka, Japan ' Graduate School of Engineering, Osaka University, 2-1,Yamadaoka, Suita, Osaka, Japan ' Institute of Business-Academic Cooperation, University of Hyogo, 123, Minami Ekimae-cho, Himeji, Hyogo, Japan ' Graduate School of Technology Management, Ritsumeikan University, 2-150, Iwakura-cho, Ibaraki, Osaka, Japan

Abstract: The automotive industry has been achieving profits by creating new value through innovations while the Japanese consumer electronic industry has been suffering from low profitability due to commoditisation. To analyse the factors helping the automotive industry avoid commoditisation, this study focuses on optional parts sales as a means to provide new customer value. It conducts customer surveys to analyse customisation and the effectiveness of directly managed stores' explanations of such value. The results suggest that customers favour customisation, and that directly managed store explanations encourage a performance-oriented customer mind-set, resulting in price increases. Thus, a mechanism is established in the automotive industry where the value created is explained to customers. This mechanism then contributes to price increases. From this, there are implications on ways to avoid commoditisation: 1) create new customer value; 2) enhance customisation to provide new value; 3) establish a value communication mechanism that encourages a performance-oriented mind-set.

Keywords: avoiding commoditisation; automotive industry; value capture; mass customisation; directly managed stores; commoditisation; value co-creation.

DOI: 10.1504/IJBSR.2018.088484

International Journal of Business and Systems Research, 2018 Vol.12 No.1, pp.85 - 105

Available online: 14 Nov 2017 *

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