17 Aug The Product Differentiation Strategy Team

Leadership Case Problem B

The Product Differentiation Strategy Team

A group of middle managers sat in a well-lit conference room overlooking the Chicago skyline. All six were impressed by the technology in the room, the furniture, and the refreshments. At 9 a.m., the meeting began, and team leader Jessica spoke first:

“We all know why we are here. Kevin, our CEO, has become convinced of the necessity of a product differentiation strategy. He thinks our conglomerate is too conventional. We go after markets in which we can compete successfully, and earn a decent profit in practically our divisions.” Team member Rob asked “So what’s wrong with being successful? What’s wrong with turning in good profits quarter after quarter, and seeing our stock price rise year by year?”

With a determined expression, Jessica said, “What’s wrong is that we are competing in traditional spaces where the competition is too intense. Kevin wants us to compete in market space that does not already exist. We should be creating a new demand, and then filling that demand. Kevin wants us to come up with some product or service differentiation, or unique, ideas that he will then consider.”

“I get it,” said Kim, “We should stay in the profitable markets our various divisions already serve. But at the same time, we should get into new markets that nobody is serving. How about making smartphones that will work during outer space travel? In a few years, we might have loads of private citizens taking trips into outer space.”

“Great sense of humor Kim,” responded Marvin, “but the demand might be too small.”

Jessica then clicked open a PowerPoint slide listing the sixty-two products and services the company already provides. She told the group, “Kevin says we should forget about these markets already being served. We have to invade new markets, maybe even create a market.

“Whoever thought 15 years ago that people would go shopping on a hand-held device while sitting in their den? Whoever thought people would pay for a package delivery service that competed with a government-backed postal service? Whoever thought people would want to 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 product differentiation strategy team, we have to identify a multimillion dollar market space that no other company is serving right now. The world already has millions of products and services being offered. How is our humble team going to identify a market of value that does not already exist?”

Jessica said, “I don’t know how we are going to find our unique strategy. But I do know that Kevin wants our report in 30 days. We’re going to meet for four consecutive full-day sessions on Thursdays to get the job done. We probably will be communicating with each other between the meetings also.

“Let’s get to work right now.”

Read the above article. Discuss the article and submit an essay containing your answers to the three questions presented at the end of the article. I am not grading based on any expected answer but rather on the completeness of the argument that is made in support of the answer.

1. What approaches would you recommend that the product differentiation strategy team use to identify new market space for the conglomerate?
2. How realistic is it for Kevin to delegate the task of finding a product differentiation strategy to a group of middle managers? Explain your reasoning.
3. What do you think would be the effectiveness of using the Internet to develop a product-differentiation strategy for the team? For example, why not go to Ask.com and enter the question, “What would be a new market space with no competition? Reference: Leadership w/ MindTapSubtitle: Research Findings, Practice, and SkillsAuthors: Andrew J. DubrinPublisher: CengagePublication Date: 2018Edition: 9th