Beating the Commodity Trap

Beating the Commodity Trap: How to Maximize Your Competitive Position and Increase Your Pricing Power

Commoditization—a particularly virulent form of hypercompetition—is disrupting industries and shuttering long-successful firms. Conventional wisdom says the best way to combat commoditization is differentiation. But this strategy is difficult (and expensive) to implement, and it keeps you ahead of the pack only temporarily.

Beating the Commodity Trap provides a radical new framework for fighting back. Drawing on an in-depth study of 30-plus industries, he recommends first identifying the commoditization trap you’re facing. He describes three:

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 pricing and unique benefits in order to attack part of an incumbent’s 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 book provides a tool for diagnosing your competitive position, and shows how to improve it while also increasing your pricing power—by destroying the commoditization trap confronting you, escaping it, or even 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.

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“Offers thoughtful insight into the strategies that businesses must embrace to survive pricing pressures. D’Aveni’s book is not only helpful, but highly readable."
Tim Solso, CEO, Cummins, Inc.