Beating the Commodity Trap
How to Maximize Your Competitive Position and Increase Your Pricing Power
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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.
Harvard Business Review Press, 9781422103159, 194pp.
Publication Date: December 1, 2009
About the Author
Richard A. D'Aveni is Professor of Strategic Management at the Tuck School of Business at Dartmouth College. The Times of London named him one of the top fifty thinkers in management. He is the author of numerous books, including Hypercompetition, and articles for publications including Harvard Business Review, Wall Street Journal, and CNN.com.