A group of middle managers sat in a well-lit conference roomoverlooking the Chicago skyline. All six were impressed by thetechnology in the room, the furniture, and the refreshments. At 9a.m., the meeting began, and team leader Jessica spoke first:
“We all know why we are here. Kevin, our CEO, has becomeconvinced of the necessity of a product differentiation strategy.He thinks our conglomerate is too conventional. We go after marketsin which we can compete successfully, and earn a decent profit inpractically our divisions.” Team member Rob asked “So what’s wrongwith being successful? What’s wrong with turning in good profitsquarter after quarter, and seeing our stock price rise year byyear?”
With a determined expression, Jessica said, “What’s wrong isthat we are competing in traditional spaces where the competitionis too intense. Kevin wants us to compete in market space that doesnot already exist. We should be creating a new demand, and thenfilling that demand. Kevin wants us to come up with some product orservice differentiation, or unique, ideas that he will thenconsider.”
“I get it,” said Kim, “We should stay in the profitable marketsour various divisions already serve. But at the same time, weshould get into new markets that nobody is serving. How aboutmaking smartphones that will work during outer space travel? In afew years, we might have loads of private citizens taking tripsinto outer space.”
“Great sense of humor Kim,” responded Marvin, “but the demandmight be too small.”
Jessica then clicked open a PowerPoint slide listing thesixty-two products and services the company already provides. Shetold the group, “Kevin says we should forget about these marketsalready being served. We have to invade new markets, maybe evencreate a market.
“Whoever thought 15 years ago that people would go shopping on ahand-held device while sitting in their den? Whoever thought peoplewould pay for a package delivery service that competed with agovernment-backed postal service? Whoever thought people would wantto 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 productdifferentiation strategy team, we have to identify a multimilliondollar market space that no other company is serving right now. Theworld already has millions of products and services being offered.How is our humble team going to identify a market of value thatdoes not already exist?”
Jessica said, “I don’t know how we are going to find our uniquestrategy. But I do know that Kevin wants our report in 30 days.We’re going to meet for four consecutive full-day sessions onThursdays to get the job done. We probably will be communicatingwith each other between the meetings also.
“Let’s get to work right now.”
What approaches would you recommend that the productdifferentiation strategy team use to identify new market space forthe conglomerate?
