Your Business can’t Escape Commoditization and Disruption

  1. Customers standing in lines from 5AM, not minding the cold weather, to pay premium price for Cronut
  2. Women willing to pay $40 for blow drying their hair, something they can do for themselves all year around for a $40 hair dryer
  3. Meat fans standing in line for burgers because of the atmosphere
  4. Starbucks fans not only paying $4-$7 for a drink but willing to pay $4.50 for just $4.00 cash value
  5. Apartment buildings turning absence of elevators from a disadvantage into a premium product

Every time someone says commoditization is here, your premium priced business will be disrupted and price is no more part of the equation  (“Amazon isn’t happening to bookstores, future is happening”, “price matching is now table stakes, if you don’t customers won’t come”) you might want to go back to the beginning of this article to read the list again.

Only when you offer an undifferentiated product that is ill suited for the customer job do you need to fear commoditization or disruption. When you ignore the impulse to serve all customers and all their needs, not base your business decision on an artificial per unit gross margin goal,  focus on those segments with an unaddressed need that they are willing to pay a premium for, you are the one leading the commoditization and disruption.

Future isn’t happening to businesses getting disrupted by Amazon and the web, their past is catching up to them. That is their past sins of not starting with customers, not focusing on their needs, and not improving the product that fills that need are simply catching up to them.

One thought on “Your Business can’t Escape Commoditization and Disruption

  1. A juxtaposition observation of “unaddressed need who are willing to pay premium” vs “Amazon’s classic fixed cost business model” incites cognitive dissonance to many. Focusing on unaddressed need is a model of rectitude for any small business trying to compete with a goliath.

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