The concept of the ''commodity magnet'' synthesis the manner in which industry dynamics can create customer value and destroy company value. the key dimensions in the model are:
* Price
* Cost to serve
<<image /static/files/MBI/Module%2011/commoditymagnet.PNG width:600>>
*  ''I'' When a company successfully innovates and markets a new offering it starts in the top right quadrant. Through its differentiation it can command a higher price. As the company is learning, it's costs of operation are also high. 
*  ''II'' A good way to enjoy pioneering advantages is to introduce the innovation to more customers (1) (a [[Product leadership strategy]]) and becoming the brand leader.
* ''III'' As a good market attracts more competition (2) (requiring a [[Customer intimacy strategy]] strategy), choice will be created for customers and prices will be forced down.
* ''IV'' When industry participants stop innovating and customers become more knowledgeable (3) (requiring a [[Operational efficiency strategy]]), the customers stops comparing and starts demanding. They now occupy the driver seat and will degrade competition in the industry.
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marketing_public
created
Sat, 15 Jan 2011 11:15:48 GMT
creator
dirkjan
modified
Sat, 15 Jan 2011 11:15:48 GMT
modifier
dirkjan
tags
M11
M11-S1 - Reading - Marketing Strategy and Organization - Chapter 4 - Strategic Ambition
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Term
creator
dirkjan