Commoditized Markets

Question 1

Commoditized market Definition

Answer 1

Market where products/services aren’t very differentiated and value proposition of different players are similar

Question 2

Commoditized mkt Quick examples

Answer 2

Chocolate bars, gas stations, rental cars

Question 3

Commoditized mkt Key characteristics

Answer 3

• few differentiating points and similar value propositions across market players
• customer segments are price sensitive
• price pressure is high
• slim margins so likely volume-driven business
• economies of scale are a key success factor

Question 4

Competitive landscape of commoditized market

Answer 4

• comp. landscape is likely consolidated with several major players that capture high mkt share and enjoy high marketing budgets, developed distribution networks, and high brand awareness (so your client is likely competing against big-name brands)

Question 5

Commoditized market example (fast food market experiencing decline in unique customers)

Answer 5

• likely fairly similar product offerings across different players
• price-sensitive customer segments so price pressure is high
• low margins, volume-driven business
• comp. landscape likely consolidated with several players that dominate the market