Post by account_disabled on Feb 18, 2024 4:16:12 GMT
Boston Consulting Group founder Bruce Henderson, the father of business strategy, was responsible for developing and deploying the first successful strategy tool in the 1960s: The Experience Curve. The approach assumed that production costs would decrease by 20-30% with each doubling of the cumulative production of a given product. So, if a company is priced "ahead of the experience curve" ' (i.e., at a price that would be profitable at a cost position that would only be reached when the company got further down the experience curve ) to ensure that it had achieved a market share ahead of its competitors, it would always have a lower cost position than its competitors and would continue to dominate the product category in question.
Note that these are two players: the company and the competition. Customers are largely a passive player in this world. They purchase the product mainly from the supplier who enjoys the lowest cost position Mobile Phone Number and therefore can be sharpest on the price. As a result of this evolution, when I began my career working with companies on strategy in 1981, concerned with the interaction between companies and customers versus strategy which was concerned with the interaction between companies and competitors.
Of course, competitors were not 100% absent for the marketing discipline. The product and pricing aspects of the 4Ps had to be considered against the competition. But when I worked with marketers, I typically had to push them pretty hard to consider how competitors would react to their potential 4P choices. Likewise, customers were not 100% absent for the strategy. Someone was buying those products influenced by the learning curve. Yet I always wondered why strategists didn't pay more attention to customer behavior.