Beating the Commoditization Trap
Commoditization – a particularly virulent form of hypercompetition – is destroying markets, disrupting industries, and shuttering long-successful firms. In this important presentation Richard D’Aveni provides a radical new framework for fighting back. Drawing on an in-...
Commoditization – a particularly virulent form of hypercompetition – is destroying markets, disrupting industries, and shuttering long-successful firms. In this important presentation Richard D’Aveni provides a radical new framework for fighting back. Drawing on an in-depth study of 30-plus industries, he recommends first identifying the commoditization trap you’re facing. He describes three:
- 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.
D’Aveni provides you with the tools for diagnosing your competitive position and shows how to improve it while also increasing your pricing power – by destroying the commoditization trap confronting you, escaping it, or even turning it to your advantage.