Escaping the Commodity Trap

The commodity trap is a danger for any established company – particularly if it sells premium products at the high end of its market. Over the course of time, competitors improve their offers until the premium product no longer has any competitive advantage.

Motivation

When commoditization has advanced far enough, customers no longer find additional value in a once-leading product and switch to an alternative that satisfies their needs at a lower price. Without innovation, the premium manufacturer must then either enter a ruinous price war or yield the market to the competition.

Objectives

Participants understand the sources and symptoms of the commodity trap and the strategies that are available to combat it. This helps them to make better decisions about how best to react to commoditization – in particular, how innovation can be used proactively to escape from it.

Summary

In this seminar, we present

  • the symptoms of commoditization
  • the different types of commoditization
  • the various methods of escape from commoditization
  • how market leaders can use innovation to shape the future direction of the market themselves