Abstract
The market for a particular product consists of many customers having different needs and wants. A local design strategy attempts to increase market share and sales revenue by designing many variants of the product to exploit these differences. Such a strategy involves increased requirements for design, manufacturing, and marketing resources. A global design strategy offers a single product concept to all customers. Thus, the choice between a local design strategy and a global design strategy poses a fundamental tradeoff to the managers in many markets. Making such a decision is a complex process as it involves many design, manufacturing and marketing factors. We present a model based on optimal control theory representing major tradeoffs that exist between a local design strategy and a global design strategy. We demonstrate, through extensive computational experiments, how the model helps to gain strategic insight into the complex tradeoffs that exist between global design strategy and local design strategy alternatives under various scenarios over the life of a product.