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2 of 2 people found the following review helpful:
5.0 out of 5 stars
How are you afraid of the Commodity Trap? Richard D'Aveni explains how to beat it, June 3, 2010
This review is from: Beating the Commodity Trap: How to Maximize Your Competitive Position and Increase Your Pricing Power (Hardcover)
I was amazed by Beating the Commodity Trap. I believe that this book is differentiated from most other strategy-based books through 3 main factors. The book takes a long term orientation, provides a big picture view of competitive strategy, and explains the book's sophisticated methodology so well that business people can use it. First, the book is not concerned with short-term marketing ploys that boost profits and volume for the next quarter. Beating the Commodity Trap focuses on looking into the future. It provides tools that help predict the market in a 2-3 year time range, and focuses on the long term positioning of a product within the market as well as changes in customers' willing to pay for different product or service attributes. Second, providing tools that reveal the big picture is not an easy task. The book's price-benefit maps couple with a deep understanding of the industry reveals the big picture by showing strategic groups, trajectories of products, and provides the data to discern the motives of rivals. One of the book's outstanding achievements is that it demonstrates how to use price-benefit mapping and analysis in a large number of industries, including the hotel, restaurant, retail, apparel, ship building, consumer electronics, and motorbike industries. Third, I really appreciate that the author devotes considerable emphasis to explaining the methodology he uses. I found it a concrete and practical tool that plays with two key dimensions of a company's competitive advantage: product positioning and competitive manuevering. The author has very high credibility. He is a very respected professor and consultant who is able to simplify a complex challenge like commoditization and split it into 3 different types, bringing recognizable cases to solve the challenge of each scenario. I personally enjoyed the author's ability to take the perspective of several competitors simultaneously. In the Zara case, he not only explains Zara's well-known strategy, but he also reveals the less well known responses if its competitors, such as Hermes, Diesel and the Italian silk manufactures. In the restaurant industry the author explains how and why restaurants change their price-benefit ratio to offer better value to customers based on how customers are willing to pay for different cuisines, locations, and different levels of service, décor and food quality. While most managers guess about how much customers are willing to pay for these attributes of restaurants, the authors shows us how to quantify the dollar amounts they actually pay. I firmly believe that Beating the Commodity Trap enables executives to foresee and identify important marketing challenges that, when addressed using his suggested strategies, can earn significant price premiums for companies, in both manufacturing and service industries.
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2 of 2 people found the following review helpful:
5.0 out of 5 stars
Insightful tool for navigating commoditization, April 7, 2010
This review is from: Beating the Commodity Trap: How to Maximize Your Competitive Position and Increase Your Pricing Power (Hardcover)
This new book by Richard D'Aveni provides a high-level, strategic view of commoditization across many products, industries and geographies. His extensive network of CEO interviews offers lucid examples and D'Aveni has humorous anecdotes which make for an enjoyable read. It should be a useful reference for senior managers and management consultants as well as MBA students. I consider the qualitative aspects of D'Aveni's frameworks to be the most useful in establish the CONTEXT for a commodity situation. Are competitors escalating, proliferating or causing deterioration within a market? What stage of commoditization are you facing, what might be a likely progression and how should you pepare a counter-attack? The quantitative analyses appear robust, although would probably be somewhat to perform (eg. price-value regressions). A well-written book and useful addition to any business library! Highly recommended.
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4 of 5 people found the following review helpful:
5.0 out of 5 stars
The people who read his book will have more market share...maybe yours, January 2, 2010
This review is from: Beating the Commodity Trap: How to Maximize Your Competitive Position and Increase Your Pricing Power (Hardcover)
D'Aveni states today's obvious truth "Commoditization can happen to any firm. Any product, any time." What is not obvious is how to deal with this truth and the author does an excellent job of characterizing commoditization and provides good descriptions of strategies to combat it. The book does not (and should not) include specific plans of attack other than through example because the complexities of actually implementing the recommended analysis and selecting a response strategy require organizational and market context for your situation. Sometimes readers are looking for "the solution" or "the magic pill" for their specific problem and this book provides you the principles and basis of understanding to start down that path while avoiding fatal mistakes. The book does provide substantiated principles and a structure that can be used with your organizational and market context to beat the commodity trap. These principles are non-trivial, presented in an organized way and D'Aveni should be commended for providing this new framework. Here are some points/quotes I enjoyed from the book: a. "Once a company is caught in a commodity trap, differentiation is rarely enough to get it back out." b. In D'Aveni's experience "commoditization is usually the result of failure to act early enough" c. With regard to just discounting prices to battle the competition D'aveni states "This has the unfortunate and unintended effect of increasing the depth and severity of the commodity trap.' d. With regard to the organizational decision making process for dealing with commodity traps D'Aveni makes a statement that is tried and true for the price benefit analysis he is describing and any other kind of managerial decision process for that matter. "...it is important to get managerial buy-in for the selected definitions, sources, and measures of benefits and prices before...otherwise the decision making process can get deadlocked by those who refuse to accept the results due to denial, or the decision making process may be derailed by those who choose to play politics with the data to enhance their personal goals and power. If you are dealing with commoditization this book will provide a better understanding of your circumstances and better understanding creates better responses. Dr. James T. Brown PMP, PE, CSP Author, The Handbook of Program Management
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