Beating the Commodity Trap

Beating the Commodity Trap

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Commoditization-a virulent form of hypercompetition-is destroying markets, disrupting industries, and shuttering long-successful firms. Conventional wisdom says the best way to combat commoditization is differentiation. But differentiation is difficult and expensive to implement, and keeps you ahead of the pack only temporarily. In Beating the Commodity Trap, Richard D'Aveni provides a radical new framework for fighting back. Drawing on an in-depth study of more than thirty industries, he recommends first identifying the commoditization trap you're facing: -Deterioration: Low-end firms enter with low-cost/low-benefit offerings that attract the mass market-as Zara did to high-end fashion companies. -Proliferation: Companies develop new combinations of price paired with several unique benefits that attack part of an incumbents' market-as Japanese motorcycle makers did to Harley-Davidson. -Escalation: Players offer more benefits for the same or lower price, squeezing everyone's margins-as the iPhone did in mobile devices. The author provides a tool for diagnosing your competitive position and shows how to strengthen it while also boosting your pricing power-by destroying the commoditization trap confronting you, escaping it, or turning it to your advantage. Illustrated with a wealth of examples, this concise, practical guide gives you the framework and tactics you need to battle commoditization.In February 2009, the company unveiled plans to invest $7 billion in U.S. factories that will make new, 32-nanometer chips and ... benefits that fit that segment, as appears to have happened in the increasingly commoditized chewing-gum business. ... a new set of hot sugar-free brands, such as Orbit, which was differentiated based on innovation and functional attributes ... with Doublemint declining 5 percent over the year before, JuicyFruit down 19 percent, and Bubblicious and Bubbleanbsp;...

Title:Beating the Commodity Trap
Author:Richard A. D'Aveni
Publisher:Harvard Business Press - 2010


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