Richard A. D'Aveni, Professor of Strategic Management

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Are You Facing a Commodity Trap?

What do high-end fashion companies, New York restaurants and Harley-Davidson have in common? All are, or have been, in a battle against commoditization. Whether caused by a new, low-cost competitor (such as fashion’s Zara), new product innovation or the introduction of substitutes and imitations (such as motorcyle maker Big Dog), commodity competition is always costly and sometimes even deadly.

What I call the commodity trap has the potential to destroy entire markets, disrupt whole industries and drive previously successful firms out of business. A commodity trap happens when a company sees its competitive position being eroded so that it can no longer command a premium price in its market.

There are several factors that lead to the commodity trap, including managers failing to innovate, issuing bad products or denying trends already in motion. Usually, commoditization is the result of a failure to act early enough. Managers just don't see commoditization coming, and they fail to respond in a timely manner.

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Research Awards

  • Academy of Management Hall of Fame
  • SMS McKinsey Award Nomination
  • 20 Most Important Strategy Books of all times
  • Seven Most Influential Strategic Theorists
  • Top 5 Management Thinkers of the Future
  • ATKearney Award

Editorial Boards

  • Strategic Management Journal
  • Academy of Management Journal (Previously)
  • Administrative Science Quarterly (Previously)
  • Organization Science (Previously)
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