Managing product variety: A study of the bicycle industry

Companies are increasingly offering more product variety, raising the questions of what are the costs and benefits of product variety and how can product variety be managed profitably. Using the United States bicycle industry as a research context, we examine the types of products, production systems, and supply chains that companies are using to provide product variety to consumers. We investigate the impact that choices in each of these areas have on different aspects of firm performance. Our research focuses on two specific marketing and operations questions. First, we investigate a hypothesized benefit of product variety by estimating the effect of product-line breadth on brand equity. Second, we compare and contrast the ability of different supply chain configurations to bring variety to consumers.