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8 Strategies To Fight Ordinary (fastcompany)
I’m writing from the air, descending into the heart of The Great Tech War of
2012: San Francisco. During my last trip here, a few weeks ago, I got a taste
of what this battle is all about. My client was a once high-flying tech
pioneer now struggling with the erosive power of commoditization. It used to
take generations for your core business to devolve from the high-margin
cutting edge to a low-price commodity. Now it can take just a few years. What
you once sold for enviable profits someone else might offer for free any day
now. View my webcast on this topic here.
My recent post about Netflix sparked a heated debate on various newsgroup
message boards, and illustrates the dilemma well. There are three ways to
price your service: cost, competition, value. When you have no competition
your price can soar to just under the value you deliver. Netflix enjoyed those
days when it was the only movie-streaming business that worked well. But as
soon as direct competition enters, things change. You have to lower your price
to resemble the competition’s and often, as in Netflix’s case, start paying
suppliers more.
So how ...
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