Commodity Differentiation: A Cross-Industry Approach

Product commoditization is an ongoing trend across industries. The consequences of commoditization include surging competition, falling prices, and shrinking profit margins. To counteract this trend, companies must operate a systematic and integrative product differentiation management. Here we present the Product Differentiation Excellence approach based on an empirical study, assessing the current state of product differentiation management in practice. Companies that achieve excellence by balancing the use of differentiation instruments, market development, and internal conditions reap substantial benefits. Product Differentiation Excellence relates to superior market and financial performance and may sustain a competitive advantage even in highly commoditized industries. This chapter addresses busy managers of companies’ facing the threat of ongoing commoditization. Managers will find ready-to-use tools for assessing and actionable recommendations and numerous best-practice examples for improving their company’s Product Differentiation Excellence.