Driven by recent socio-economic developments, manufacturing firms increasingly adapt their business models along two dimensions. Apart from vertically integrating the entire product life cycle, traditionally separated tasks are re-allocated into new forms of horizontal stakeholder collaborations. Incorporating these two dimensions, this article develops a framework of nine business model archetypes that holistically capture the increasing openness of business models towards consumers in the emerging closed-loop value chain. Using illustrative examples, it demonstrates their broad applicability in different industries and derives important managerial implications for firm-consumer relationships, the relevance of consumer communities, new product development activities, and the sustainability of business models.

This is an MIT Sloan Management Review article. Executives tend to think of mass customization as a fascinating but impractical idea, implemented in only a small number of extreme cases, such as Dell Inc. in the PC market. But over the past decade, the authors have studied mass customization at different organizations, including a survey of more than 200 manufacturing plants in eight countries. From that investigation, they found that mass customization is applicable to most businesses, provided that it is appropriately understood and deployed. The key is to view it fundamentally as a process for aligning an organization with its customers' needs through the development of a set of three organizational capabilities. Those three fundamental capabilities are: (1) the ability to identify the product attributes along which customer needs diverge, (2) the ability to reuse or recombine existing organizational and value chain resources, and (3) the ability to help customers identify or build solutions to their own needs. Admittedly, the development of these capabilities requires organizational changes that are often difficult because of powerful inertial forces in a company, but many obstacles can be overcome by using a variety of tools and approaches, and even small improvements can reap substantial benefits. The trick is to remember that there is no one best way to mass customize: Managers need to tailor their approach in ways that make the most sense for their specific business.

This is an MIT Sloan Management Review article. New products suffer from notoriously high failure rates. Many fail, not because of technical shortcomings, but because they simply have no market. Not surprisingly, studies have found that timely and reliable knowledge about customer preferences and requirements is the single most important area of information necessary for product development. To obtain such data, many organizations have made heavy--but often unsuccessful--investments in traditional market research. The authors provide an alternative. Companies including Threadless, Yamaha, and Ryohin Keikaku have integrated customers into the innovation process by soliciting new product concepts directly from them. These firms also ask customers to commit to purchasing a new product before the companies commence final development and manufacturing. This process--called "collective customer commitment"--can help companies avoid costly product failures. In essence, collective customer commitment enables firms to serve a market segment efficiently without first having to identify that segment and helps convert expenditures in market research directly into sales.