Cost strategic management as an instrument to reduce trade-off between cost and differentiation based on flexibility

Abstract

The goal of this research was to investigate how cost strategic management can help to reduce costs resulting from the strategy based on customized systems. The methodological focus used was the single case study, developed in a furniture company. This company changed its production strategy, previously focused on standardized furniture, for customized mass production. The data mining process included documents analyses and semi-structured interviews performed with the companys managers. As a conclusion we identified that the initial existing trade-off between costs and flexibility was partially reduced by the use of cost strategic management techniques, which led to changes in the productive process. Such reduction was not even more dramatic because of the still limited possibilities this company has to explore its value chain relations.