When a new technology comes to the market, it is novel and there are no competitors. But, as time passes there are other entrants to the marketplace and the competition heats up. Soon, other companies start coming into the marketplace and creating their differntiators that make them unique in the marketplace with features. For a biological example, consider centrifuges. These are essentially just tube-holders stuck on top of a motor and enclosed for safety. The enable much of the biological separation but consider the market at the beginning when there was just one company that made good centrifuges. It was popular and everyone wanted their machines. Later came others that went at higher speed as their differentiator. Others still came up with digital control and interface. The enclosures changed but the market currently has no differentiator – almost all the centrifuges in the market look similar.
As time goes forward, there will be other entrants, who offer cheaper centrifuges but essentially most of the centrifuges from everyone in the marketplace will be similar. There is absolutely no differentiator that makes one company stands out. You can have a higher speed than the other, offer cooling while spinning, or even nicer service. But essentially all the manufacturers are doing that – so how do you succeed?
In all the cases, being the lowest priced item is a losing proposition since there will always be someone who will come up that is cheaper than you or more economical in features. Price is one area that is extremely important to track with the competition but for the purpose of this differentiation discussion, the attention will be on creating value beyond the price that justifies the product in the marketplace.
In the next few blogs, we will look at some of the things that a company can do to sell a commodity item, whether it is a centrifuge or a microscope or any other fancier commodity item like a PCR machine or sequencer.