By Abbey Klaassen (Editor)
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Extra resources for Advertising Age - 28 March 2011
It is essential to be ﬂexible and creative, and to understand what customers value. Cemex transformed its small commodity business in Monterey, Mexico, into one of the largest cement companies in the world through a radical reassessment of what would drive proﬁts. It has outperformed its international rivals, Holcim and Lafarge, in share price, operating margins, and return on assets. Cemex moved from 34 • 100 GREAT BUSINESS IDEAS selling concrete as a product by the yard, to selling timely delivery of a commodity.
Starbucks’ well-known tendency to open branches within minutes of each other represents a ﬁerce desire to keep competition at bay. Even though these branches will be competing with each other for a limited number of clients, Starbucks has recognized that this is preferable to competing with other potential market leaders, such as Costa Coffee and Caffè Nero. Manufacturers of computer hardware and software, such as Apple, Intel, and Microsoft, are other well-known examples of cannibalization. By regularly bringing out upgraded versions of their products (ie faster computers or more virus-resistant software) they not only remain at the cutting edge of the industry; they also persuade customers to purchase new products, and allow less room for competitors to encroach into their market.
In practice Understand how demography might be affecting your key markets. What are the trends? Where are the opportunities and threats? Who are your customers now and who will they be in the future? 100 GREAT BUSINESS IDEAS • 27 12 MASS CUSTOMIZATION Large-scale information gathering and storing enables the provision of a high-quality, personalized service for each client. By adding value to your product, you can shut out competitors and ensure repeat business. The idea By applying information technology effectively, and training all of its employees to use information, the Ritz-Carlton hotel chain has, over the last 15 years, developed into one of the most successful luxury hotel chains in the world, providing customers with a highly personalized service.
Advertising Age - 28 March 2011 by Abbey Klaassen (Editor)