Strategy very often includes a need to beat competitors as well as running our own business well, and we have long understood how competitive forces affect industry profitability. Those forces include not just existing direct competitors, but customers’ buying power, suppliers’ control of key inputs, and pressure from substitute products and new competitors. Firms can and do try to manipulate those forces to support stronger profits, for example by getting their customers locked-in to buying from them in some way.But ...Continue Reading → Share
Posted by: Kim Warren
When introducing new products and services, firms race to provide sufficient functionality to make them useful enough for customers to buy. As usage rises, suppliers compete by “improving” their products — adding to the sheer number of features included (figure 1). In effect, functionality for such products and services lies behind the user benefits captured by the value curve of reasons why customers choose the product and stick with it rather than switching to rival products.