A group of middle managers sat in a well-lit conference room overlooking the Chi

Question

A group of middle managers sat in a well-lit conference room overlooking the Chicago skyline. All six were impressed by the technology in the room, the furniture, and the refreshments. At 9 a.m., the meeting began, and team leader Jessica spoke first:

“We all know why we are here. Kevin, our CEO, has become convinced of the necessity of a product differentiation strategy. He thinks our conglomerate is too conventional. We go after markets in which we can compete successfully, and earn a decent profit in practically our divisions.” Team member Rob asked “So what’s wrong with being successful? What’s wrong with turning in good profits quarter after quarter, and seeing our stock price rise year by year?”

With a determined expression, Jessica said, “What’s wrong is that we are competing in traditional spaces where the competition is too intense. Kevin wants us to compete in market space that does not already exist. We should be creating a new demand, and then filling that demand. Kevin wants us to come up with some product or service differentiation, or unique, ideas that he will then consider.”

“I get it,” said Kim, “We should stay in the profitable markets our various divisions already serve. But at the same time, we should get into new markets that nobody is serving. How about making smartphones that will work during outer space travel? In a few years, we might have loads of private citizens taking trips into outer space.”

“Great sense of humor Kim,” responded Marvin, “but the demand might be too small.”

Jessica then clicked open a PowerPoint slide listing the sixty-two products and services the company already provides. She told the group, “Kevin says we should forget about these markets already being served. We have to invade new markets, maybe even create a market.

“Whoever thought 15 years ago that people would go shopping on a hand-held device while sitting in their den? Whoever thought people would pay for a package delivery service that competed with a government-backed postal service? Whoever thought people would want to read make and receive phone calls while driving in their cars, riding a bike, or sitting in a ski lift?”

Cecilia commented, “You are saying that as the product differentiation strategy team, we have to identify a multimillion dollar market space that no other company is serving right now. The world already has millions of products and services being offered. How is our humble team going to identify a market of value that does not already exist?”

Jessica said, “I don’t know how we are going to find our unique strategy. But I do know that Kevin wants our report in 30 days. We’re going to meet for four consecutive full-day sessions on Thursdays to get the job done. We probably will be communicating with each other between the meetings also.

“Let’s get to work right now.”

What do you think would be the effectiveness of using the Internet to develop a product-differentiation strategy for the team? For example, why not go to Ask.com and enter the question, “What would be a new market space with no competition?”

Explanation / Answer

I strongly feel that internet is not the right source to think of a product differentiation strategy. Product differentiation strategy itself means that a product has to be made having certain different features and which will cater to the market which is not being served i.e. untapped market would be considered. The internet would only show the secondary data that is there in the market and we are looking for primary data that can only be thought upon by intelligent business individuals, the ideas would come on their own, the ideas might be a byproduct of the learning levels of each individual and hence asking from a website to suggest a new business model might not be a great idea as far as the product differentiation strategy is concerned.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.