A Time for Change
Commoditization seems to be an unavoidable force pulling companies’ products and services downward until price determines customers’ choices. Many years ago, it took years for price premiums to disappear. Today, unfortunately, companies are quickly falling victim to commoditization. It appears that even new or customized products and well-known brands aren’t immune.
According to the authors, it is possible to escape the pull of commoditization, but this requires more than product innovation. Beyond Price identifies best practices in strategies and management — including business model strategy, operational execution, culture, leadership and management — to help corporate leaders to reinvent their business models and fully recognize all the opportunities available to them.
The effort is well worth it. Companies will gain price premiums, more loyal customers and faster decision making, as well as clearer direction, superior resource utilization and more collaborative teams.
Keep Away From Commoditization
The intent here is to help corporate leaders stay away from the commodity business and, instead, build a thriving business that isn’t price-driven. The secret is building a unique company. As the authors write, “Leaders have to separate their company and its products and services from the herds in ways that competitors cannot easily copy.”
Admittedly, it isn’t easy to eliminate commoditization. The secret lies in eight steps described in Beyond Price that create a framework to help management understand its strategic role and perform in a way that leads to marketplace victories and financial success for their company. The book is divided into three parts, each part taking the company’s leadership through critical thinking. In the first part, management is helped to understand the root cause of its corporate problem of commoditization and then how to become market driven, not customer driven. Finally, the management team is helped to conduct a strategic assessment.
Readers become change agents as they address the subject matter in the second part of the book. Here is where executives and managers learn how to design a new, strategically differentiated business model, realign the leadership team and, finally, create a meaningful corporate aspiration — in other words, a hard-to-replicate strategic model.
The third part of the book makes the aspiration a reality as readers create and learn how to manage the new business by establishing strategic goals and creating an annual planning process to achieve them. Finally, readers will learn how to align culture with strategy. This is critical to transforming the business from one of many to the one-of-a-kind company that will leave the pack behind.
Enacting Cultural Change
Culture may be a catalyst or barrier to change depending on the leadership team. The authors point out that this crucial step in organizational transformation can often go awry as focus is diverted to needs that appear more urgent.
Readers may find themselves wondering at what level of the company should change begin? The answer depends on the levels of trust and openness within the organization. Lack of openness within leadership teams or between the team and the rest of the organization, and the culture change, must start at the top and then open up to others. If there is a high level of trust and openness throughout the organization, then a broader group of managers and co-workers can become involved in the shift away from a commoditization business.
There is considerable savvy advice in this book on how to deal with a business, beyond the subject of commoditization. In this book, readers can learn how to transform their business models to accelerate growth and profitability. Readers will be able to make their companies “categories of one” in their markets and high-performance businesses, at that.