Decisive economies and opportunity cost of modular product structure alternatives: An empirical case study

Versatile, global markets as well as the increasing demand for more individualized products has increased the pressure on companies to offer a broad variety of products. Developing modular product families is an established approach to provide a suitable variety under economic conditions. However, balancing the demands for more external variety and less internal variety is a complex task for product development, affecting multiple domains in companies. In this paper, we conduct an empirical case study and investigate the correlating effects of external and internal variety on respective performance indicators (PI). Within two companies, we identify recurring chain reactions across ten decision scenarios and derive a subset of PIs affected by modular product structure alternatives (MPSA). In addition, the results highlight the major trade-offs between different target dimensions that occur while choosing dissimilar product structure alternatives.