Impact on companies
As commoditization progresses, companies find themselves having to compete with others on the price of their products or services rather than on the uniqueness of those products or services.
However, if you lower your prices below those of your competitors, you will inevitably have to cut costs, which will affect consumer opinion of your product and lead to a decline in business performance.
For example, even between smartphones with similar performance, discerning consumers will notice small differences.
If the cost-cutting measures taken to lower prices become apparent, it can lead to an exodus of customers. In this way, commoditization makes it difficult to strike a balance in marketing.
Consumer impact
Commoditization appears to have benefits from the consumer's perspective.
For example, although smartphones are unique to each company, the design and UI are largely standardized, making them easy for anyone to use.
Due to commoditization, the basic operations do not change even if the OS is changed, so anyone can use basic functions such as phone and email without confusion.
This "commonization of standards" through commoditization will also lead to increased global competitiveness.
When Galapagos mobile phones were mainstream in Japan, they were almost exclusively available for use in Japan.
However, thanks to the commoditization of smartphones, some manufacturers have gained the competitive edge and reputation to compete on a global scale.
Combating commoditization
What measures can be taken to avoid commoditization? Here are some things you can do:
Commoditization countermeasure 1: Implement a differentiation strategy
Commoditization countermeasure 2: Emphasis on user subjective evaluation
Commoditization Countermeasures 3Establish a brand
Implement a differentiation strategy
A company that had been developing and selling smartphones for many years had at one point lost its competitive edge due to commoditization.
However, by continuing to pursue strengths that only the company can offer, such as its own unique camera app and design, the company has gained a competitive edge on the global stage and has ultimately been able to increase its market share.
This example shows that in order to avoid commoditization, we must continue to innovate without fearing a temporary decline in productivity.
Developing products japan cell phone number list and services that focus on user evaluation is important in avoiding commoditization.
Corporate developers trying to innovate often fall into the trap of prioritizing uniqueness over commoditization and easily losing sight of the user's perspective.
In this regard, companies need to develop strategies to avoid commoditization by striking a balance between what users want and what they want to stick to.
Build your brand
Once you have established your brand as a company, even if your product becomes increasingly commoditized, you will be more likely to attract long-term customers because "it is a product that your company makes."
The most obvious example is the iPhone. Even now, when smartphones themselves have become commoditized and there is almost no difference between them and their rivals, the company Apple and the iPhone itself are still brands.
As a result, there are a lot of fans who continue to buy new models simply because it is a smartphone sold by Apple.