Aligning product variety with supply chain and business strategy

Purpose The purpose of this paper is to demonstrate the strategic alignment between product variety and supply chain (SC) focus through cost leadership or differentiation to improve business performance. Design/methodology/approach The research investigated product variety-related capabilities and strategies in SCs including level of variety, SC agility, SC cost efficiency, cost leadership, differentiation and business performance, and aimed to justify the theory by testing structural equation modelling using survey data from the UK and South Korea. Findings Differentiation links high product variety and agile SC while cost leadership is aligned with low product variety and SC efficiency. High product variety negatively impacts on cost leadership strategy. Also, product variety should be mediated by cost leadership or differentiation strategy to improve business performance. Companies in South Korea display higher SC agility, cost leadership and cost efficiency than companies in the UK, while the UK companies exhibit a higher level of product variety and differentiation than those in South Korea. Research limitations/implications The findings contribute to theoretical development of variety issues at the alignment of business strategy and SC management according to the level of product variety. Originality/value The findings can help international companies set up specific variety-related strategies to achieve global competitiveness.