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Little nightly thoughts
by Business Exploration

Dear Fellow Innovator,

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If your sales force says that the only way to compete is “price”,
there are good chances that your offer reached a “commodity” status and
you have a really hard time in making your company meet the sales target.

Unless your product or service has been displaced by a new offer
capable to make the same job in a different way ( but substantially better: e.g. cars vs horses ),
one way to see what is happening may be suggested by latest
prof. C. Chirstensen innovation’s management theories.

Let's see how:


You are doing your job too good:

your offer may have ended up over-performing what the Customer needs (uses) to make his job done.

This may happen because:

  • your high-end customers have shrunk
    yes: those clients that have never enough of the performance of your product, have shrunk so much to basically disappear or be totally won by a competitor ( leaving you and all the rest of the competitors' pack fighting for the business opportunities left over )
  • a new type of product/offer ( an innovation ) has disrupted your market,
    stealing all the Customers.

Forget this last situation for a while.: You are in the first one.
After all, is not so easy to bring on the table a totally different idea and kill a market.

How to recover competitiveness?

Here some options, ( apart the usual optimization efforts, best practices, and self-esteem sessions…)

  1. ally and conquer
    you can join the forces with other competitors to gain economy of scale and squeeze out the others.
  2. you can integrate upstream
    gaining a cost advantage that can make you ( or the supplier who bought you…) better equipped for a price war
  3. you can integrate downstream
    Moving to the service side of your business and becoming a system integrator of a larger scope of supply, may help you differentiate again in the eyes of a customer anxious of reducing his fixed costs.
  4. you can disintegrate your business
    Splitting it into the basic components, may help find better sub-systems performances, e.g. moving a subsystem to a Low Cost Country to save costs or closer to the Customer to improve commercialization.
  5. you can integrate your business
    If your business is based on a standard industry platform (probably the same that your competitors are using too), being able to find a way to offer the same level of performance using a totally new (simpler and more convenient ) integrated system, can make you go beyond competitiveness: can make you win the market. (e.g. netbooks vs tablets)
  6. you can buy a new technology
    Buy it where has been developed and import it into a new (local) market, or hire key technologist/marketers and their network, to achieve a new technology transfer and adoption. So changing the game completely…But this is situation “Disruption”…


Don't miss the next hint:


300 more templates and ideas:

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