Challenging the advantages of scale: disposable factories and strategies

Abstract

Purpose

The paper aims to examine the views of noted consultant George Stalk, who turns economy of scale strategies upside down by suggesting disposable strategies.

Design/methodology/approach

The paper explains when you can get the most strategic advantage from disposable factories. The model should be considered when, for example, you face extreme uncertainty owing to a highly dynamic, competitive market or the potential for disruptive innovation or the size of a new business opportunity is not clear.

Findings

The paper finds that disposable factories provide a low‐risk means of jumping in and out of fast‐moving markets. They can lower overall costs, save valuable time getting to market, and reduce capital risk of overestimating the demand.

Practical implications

A disposable factory is built as inexpensively as possible with the primary purpose of getting a new product into the market quickly. It is also designed to be easy to shut down if the market demand is not what you expect. The benefits are readily apparent: disposable factories provide a low‐risk means of jumping in and out of fast‐moving markets.

Originality/value

The disposable factory is not a new idea. In fact, disposable factories are already often used where the situation requires a facility than can be operating quickly at relatively low‐cost and then can be quickly disassembled. The point is that “disposability” is an underappreciated tactic. Disposable factories and disposable strategies are all about investing in options and seeing how opportunities evolve.

Citation

Stalk, G. (2008), "Challenging the advantages of scale: disposable factories and strategies", Strategy & Leadership, Vol. 36 No. 4, pp. 19-20. https://doi.org/10.1108/10878570810888722