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| − | 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: | + | The Commodity Magnet |
| − | * Price
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| − | * Cost to serve
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| − | <html><img src = "/static/files/MBI/Module%2011/commoditymagnet.PNG" width="600"/></html>
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| − | * '''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.
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| − | * '''II''' A good way to enjoy pioneering advantages is to introduce the innovation to more customers (1) (a [[Product leadership strategy|Product leadership strategy]]) and becoming the brand leader.
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| − | * '''III''' As a good market attracts more competition (2) (requiring a [[Customer intimacy strategy|Customer intimacy strategy]] strategy), choice will be created for customers and prices will be forced down.
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| − | * '''IV''' When industry participants stop innovating and customers become more knowledgeable (3) (requiring a [[Operational efficiency strategy|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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| | [[Category:marketing]] | | [[Category:marketing]] |
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