Differentiation versus Decommoditization: Strategies for Haves and Have-nots

Differentiation is seen as a value building, remunerative strategy in product and business development. Differentiation as a strategy evolves along with industry structure. When an industry is built around a first-to-market pioneering monopoly product, differentiation is of academic interest as the product constitutes the entire industry. As new players with identical or similar products enter the industry, differentiation emerges as the differentiator amongst different firms. However, when competition reaches a saturation point, the feasibility of differentiation declines even as the importance for cost leadership climbs up. Popularly, when competition becomes intense and differentiation becomes difficult, a product is seen as a commodity product. As an axiom, differentiation tends to be inversely correlated with commoditization, and vice versa. Yet, firms with investible resources tend to pursue differentiation as a premium strategy even in commoditized industries.

Differentiation tends to be primarily on product technology. In certain cases, it can be in terms of branding, channel marketing, and point-of-sale strategies. Technology-driven differentiation tends to be more robust and sustainable relative to other forms of differentiation. Firms can seek to be differentiated not only by offering highly unique products but also by offering a diverse range of products. In many cases, differentiation around a single product becomes vulnerable and firms are forced to field a broad range of products to meet multiple consumer needs. There was a time when Maruti Suzuki held almost 100 percent of the Indian car market with only one product, the 800cc car. Yet, its dependence on small cars coupled with the entry of other global car manufacturers in India led Maruti Suzuki cede 50 percent of its share to competition. Diversity for a firm leads to differentiation of sorts. Diversity does not, however, stop commoditization. Many analysts equate with commoditization with genericization, and vice versa. This, however, is not necessarily true.

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What Palm Holds, Eyes Behold: The Retro-Futurism of iPhone SE

Apple sprang a surprise in 2016 by bringing back its 4-inch iPhone 5 as Apple SE, signifying, on the face of it, one of the most dramatic retroreturns of all time. The earlier perception was that it was intended as an option to address the midrange price point, especially in emerging markets such as India and China. However, the announced pricing of Rs 39,000 for the 16 GB version and Rs 49,000 for the 64 GB version defy that assumption by making SE as pricey as the larger siblings. Apple SE actually brings out certain interesting lessons. First, the profile of Apple SE packs the contemporary iPhone 6s and 6S Plus specifications in the 4-inch form factor by featuring the latest A9 chip, iOS 9.3, 12 megapixel camera, 4 K video, retina display, Siri, and features such as live photos and night shift. In terms of body materials, finishes, and colour options, it matches the latest generation iPhones. Experts who reviewed Apple SE vouch for the top-of-the-line features of the phone.

At one level, Apple SE may be seen to be following what Samsung or Nokia did to date, offering different products in different form factors and at different price points. There is one important difference, however. Samsung and Nokia brought in different products with different specifications; moreover, in their case, lower positioned products had lower specifications, invariably. On the other hand, Apple SE offers the best of specifications in a retro form factor. There is nothing retro on its form factor finish either! On the other hand, it represents what Apple always represented, a combination of the top-end hardware and software. The logic and rationale behind Apple SE, the first retro revival in the smartphone industry, have important considerations, which are relevant not only for smartphones and other electronic devices but also for all other products as well.

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From Product Life Cycle to Process Life Cycle: The Need for a Paradigm Shift in Managerial Thinking

Product Life Cycle has been an enduring management concept. It is based on the fact that every product goes through four distinct phases of introduction, growth, maturity, and decline in its life. The product life cycle curve varies based on the nature of the product, the firm, and the industry. While the level of innovation in a product determines the extent of introduction and growth phases, the level of competitiveness and competition determines the onset and extent of maturity and decline phases. All firms would like to shorten but spike up the introduction phase, enhance and extend the growth phase, delay and sustain the maturity phase, and preferably avoid and, if unavoidable, supplement the decline phase with a new product life cycle.

Ideally, product life cycles occur in waves. As one product moves into the latter half of its growth phase, the agile and innovative firm would seek to bring a new product (complementary or substitute) into the introduction phase. An overlapping wave structure of product life cycles moving with time ensures that the firm retains market dominance, with a portfolio of products. Firms which are market-savvy and technology-driven are in a continuous quest for product life cycle optimization, including extending product life cycle through product improvements in the maturity phase of the life cycle. Firms are so focused on products that they miss another important aspect of all human and organizational endeavour, which may be called the Process Life Cycle.

For more...http://cbrao2008.blogspot.in/2014/03/from-product-life-cycle-to-process-life.html