Surviving in a Commoditized World

This paper examines why organizations have adopted a wide range of responses when addressing the opportunities and threats posed by commoditization. Some may choose to focus on their cost base, whilst others may focus on innovation. Whatever strategy is adopted, it will be driven by a range of factors including the market or markets in which the organization operates the nature of its competition and how easy it is for them to become commoditized. This paper will present Ryanair, Wal-Mart, Starbucks, Tesco, General Electric and Dell as examples of which highlight how different organizations have approached the challenge of commoditization. What we can conclude from these is that there are many different ways to tackle commoditization and that many organisations do so successfully. For those organizations which are comfortably outside the commoditized zone, it will give them some insights on what to do should the risk of commoditization increase to a point where action is necessary.