Commoditization — The Sword of Damocles
In the previous two chapters we witnessed the constant efforts of firms to stay at the top as witnessed in the case of the iPod, or to lead a fight back by continuously innovating (LEGO, Barbie) and the rapid rise and dramatic fall of an erstwhile digital giant (Netscape). In each of the cases, the Integrated Model provided a useful framework for analyses. Yet another threat for firms is that of commoditization. Like the proverbial sword of Damocles, there is a constant and impending threat of commoditization looming over even the most innovative products. When price becomes the lowest common denominator, managers increasingly scratch their heads, wondering not of how to remain a wolf, but how to differentiate themselves and manage to stay in fox territory. Commoditization is the gravity pull of the sheep in the archetype space of the Integrated Model.
KeywordsInnovation Life Cycle Product Life Cycle Product Lifecycle Unit Production Cost Dominant Design
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