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Category Innovation

In: Dynamics of Knowledge, Corporate Systems and Innovation

Author

Listed:
  • Ken Kusunoki

    (Hitotsubashi University)

  • Satoshi Akutsu

    (Hitotsubashi University)

Abstract

The essence of commoditization lies in the reduction of the value of a product or service to the single, most visible dimension through competition; namely, that of price. We assume that commoditization can be controlled by intentionally lowering the visibility of the value dimension and configuring conditions under which is difficult to make comparisons with competing products. Such an assumption emphasizes the importance of “invisible differentiation”, differentiation in invisible value dimensions, as an effective strategy for de-commoditization. In practice, however, it is difficult for companies to realize such invisible differentiation. There is a natural tendency to direct efforts and resource allocation toward innovation in dimensions with great visibility, which drives companies to the ironic paradox that the very effort to overcome commoditization through innovation instead actually promotes commoditization. This chapter calls it the “visibility trap”, and examines the consequence where “innovative” and “differentiated” products rather intensify commoditization. We will also discuss some implications for de-commoditization strategies through invisible differentiation.

Suggested Citation

  • Ken Kusunoki & Satoshi Akutsu, 2010. "Category Innovation," Springer Books, in: Hiroyuki Itami & Ken Kusunoki & Tsuyoshi Numagami & Akira Takeishi (ed.), Dynamics of Knowledge, Corporate Systems and Innovation, chapter 0, pages 191-208, Springer.
    • Handle: RePEc:spr:sprchp:978-3-642-04480-9_8
    DOI: 10.1007/978-3-642-04480-9_8
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