• Login
    • Join
  • FOLLOW:
  • Subscribe Free
    • Magazine
    • eNewsletter
    Checkout
    • Magazine
    • News
    • Research
    • Markets & Technologies
    • Raw Materials
    • Top Companies
    • Directories
    • Jobs
    • Events
    • Microsites
    • More
  • Magazine
  • News
  • Research
  • Markets & Technologies
  • Raw Materials
  • Top Companies
  • Directories
  • Jobs
  • Events
  • Microsites
  • Current / Back Issues
    Features
    Business Corner
    Editorial
    Digital Edition
    eNewsletter Archive
    Our Team
    Editorial Guidelines
    Subscribe Now
    Advertise Now
    World Reports
    eBook
    Top Features
    Additives Update

    Pigment Supplier Directory

    Interior Architectural Coatings

    Biocides Update

    Powder Coatings Market
    Breaking News
    Online Exclusives
    Distributor News
    Financial News
    Paint & Coatings Manufacturer News
    People In the News
    Price Increases
    Product News
    Video Bites
    Raw Materials & Equipment
    Suppliers News
    Live From Shows
    Top News
    Huntsman Finalizes Acquisition of Gabriel Performance Products

    PPG Completes COLORFUL COMMUNITIES Project at School in A. Bangsaothong Samutprakarn, Thailand

    Axalta Schedules Q4, Full Year 2020 Earnings Conference Call

    Datacolor Introduces High-Efficiency Benchtop Spectrophotometer Series, Spectro 1000/700

    LANXESS Acquires Biocides Specialist INTACE
    Top Companies report
    Market Research
    White Papers / Tech Papers
    Technical Papers
    Product Spec Sheets
    World Reports
    Adhesives and Sealants
    Aerospace Coatings
    Architectural Coatings
    Automotive Coatings
    Automotive Refinish
    Business Operation
    Color Trends & Forecast
    Construction Chemicals
    Corrosion Control
    Industrial Coatings
    Laboratory Equipment
    Marine Coatings
    Market Trends & Forecast
    Powder Coatings
    Production Equipment
    Radcure Coatings
    Special Purpose Coatings
    Wood Coatings
    "Green" Coatings

    Datacolor Introduces High-Efficiency Benchtop Spectrophotometer Series, Spectro 1000/700

    Zeppelin Acquires MTI Mischtechnik

    IFS Coatings Announce Carbon Offset Program

    Axalta Powder Coatings Presents SuprAnodic Collection

    Deadline for RadLaunch UV+EB Technology Accelerator is Jan. 30
    Additives
    Binders
    Pigments
    Solvents

    Huntsman Finalizes Acquisition of Gabriel Performance Products

    LANXESS Acquires Biocides Specialist INTACE

    dar-tech, inc. Becomes U.S. Midwestern Distributor for ZS Interpolymer

    OQ Chemicals Announces Carboxylic Acids Price Increase

    AOC Announces Price Increase
    Buyers Guide
    Company Capabilities
    Distributor Guide
    Add New Company
    International Buyers Guide Companies
    Active Minerals

    Keim Additec Surface USA LLC

    Shepherd Color Company, The

    Pilot Chemical Company

    Eagle Specialty Products
    Industry Events
    Webinars
    Live From Show Event
    Top Events
    The Waterborne Symposium (2021)

    Surface Finishing Mexico 2021

    PCI Powder Coating Week

    Southern Society for Coatings Technology Annual Meeting and Technical Conference

    Coatings for Africa
    Companies
    White Papers/Tech Papers
    Product Spec Sheets
    Equipment
    Literature/Brochures
    Videos
    International Buyers Guide Companies
    Siltech Corporation

    Shepherd Color Company, The

    ROSS Mixers

    Eagle Specialty Products

    Keim Additec Surface USA LLC
    • Magazine
      • Current / Back Issues
      • Features
      • Editorial
      • Business Corner
      • Digital Edition
      • eNewsletter Archive
      • Editorial Guidelines
      • Subscribe Now
      • Advertise Now
    • Breaking News
    • Directories
      • Buyers Guide
      • Distributor Guide
      • Corporate Capabilities
      • Trade Associations
      • Add Your Company
    • Markets & Technologies
      • Adhesives and Sealants
      • Aerospace Coatings
      • Architectural Coatings
      • Automotive Coatings
      • Automotive Refinish
      • Business Operation
      • Color Trends & Forecast
      • Construction Chemicals
      • Corrosion Control
      • Industrial Coatings
      • Laboratory Equipment
      • Marine Coatings
      • Market Trends & Forecast
      • Powder Coatings
      • Production Equipment
      • Radcure Coatings
      • Special Purpose Coatings
      • Wood Coatings
      • "Green" Coatings
    • Raw Materials
      • Additives
      • Binders
      • Pigments
      • Solvents
    • World Reports
      • Africa Report
      • China Report
      • India/Asia Pacific Report
      • Europe Report
      • Latin America Report
      • Market Research
      • Russian Report
    • Top Companies
    • Online Exclusives
    • Slideshows
    • Experts Opinions
    • Blog
    • eBook
    • Infographics
    • Videos
    • Podcasts
    • Whitepapers
    • Jobs
    • Microsites
      • Companies
      • White Papers/Tech Papers
      • Product Spec Sheets
      • Equipment
      • Literature/Brochures
      • Videos
    • Events
      • Industry Events
      • Live From Show Event
      • Webinars
    • About Us
      • About Us
      • Contact Us
      • Advertise With Us
      • Privacy Policy
      • Terms of Use
    Business Corner

    The Role of Differentiation in Strategic Planning and Value Creation

    ...

    The Role of Differentiation in Strategic  Planning and Value Creation
    Figure 1: Life Cycle of Products and Markets
    Related CONTENT
    • Call for Papers for the International Coatings Congress (ABRAFATI 2019)
    • AkzoNobel Developing Coatings That 'Paints Itself'
    • JNS-Smithchem Launches New Website with Expanded Services
    • Hempel Launches New Antifouling Solution
    • Readco Unveils Tabletop Continuous Processor Sized for Labs
    Gary Shawhan and Phil Phillips, Contributing Editors 04.12.19
    Differentiation is an important attribute in strategy development and value creation. While this term is most often used in the context of a unique coating product or an additive technology, it also has much broader strategic implications.

    “Differentiation” is something that coating manufacturers strive for to set them apart from competitors. In the broadest sense, companies not only want this term to relate to their products and services but also their overall image in the markets they serve. In this article, the focus is on the role of product differentiation in value creation and its retention.

    The strategic implications that evolve over the product life cycle are also discussed.

    As formulated coatings, differentiation commonly refers to the features and benefits provided by the use of such coatings in one or more market applications. When introducing a new coating to the market, the impetus behind it is in its ability to address one or more unmet needs that exist in the marketplace. This scenario provides the platform for the sales and marketing strategies and related business goals for the company within the targeted market spaces.

    The traditional graphic (Figure 1) outlining the “life cycle” of a product also applies to the markets that they serve. This graphic also provides a basic template for the changes that need to be made in strategy as products (and the markets they serve) move through their life cycle.

    In emerging markets, the structure of the business opportunity is often very fluid and contains a number of undefined elements and transitional issues. This not only creates opportunities for new products but bring with it risks as well. These risks include a greater likelihood that alternative coating products are introduced into the market by competitors early in its life which diminish its uniqueness Risks may also involve a shift in the performance criteria required during the early stages of the market introduction.

    Importantly, it is during this “emerging phase” that the baseline is set for profitability and the value of differentiated coating technologies is established in the marketplace.

    As markets begin to experience growth, the competitive framework starts to establish itself. This includes sharpening the list of competing suppliers of coatings who will serve these markets going forward. it also brings into focus other important business elements that begin to shape the overall competitive environment. Table 1 lists some of these “other” elements of supplier differentiation.

    As individual markets evolve and begin to mature, these “other elements” take on increasing strategic importance in their ability to retain differentiation. They also provide the basis for strategic planning and a guide to identifying those aspects of the business that need to be strengthened to grow and retain a strong market position going forward.

    Table 1: Other Elements of Differentiation Beyond Product Performance
    • Technical and application engineering    support
    •  Next generation product development planning
    •  Cost position in raw materials
    •  Total cost-of-ownership for the process
    •  Manufacturing cost position
    •  Geographic market reach
    •  Channel-to-market strength/distribution
    •  Brand identity

    Next Generation Product Development

    The inventiveness that goes into new product design through research and development is fundamental to establishing a differentiated position in the marketplace. The goals and objectives behind novel product development vary.  In certain cases, new products are developed in response to specific customer problems or unmet needs within a given market segment. In other situations, they are the result of the creativity and vision that comes through anticipating transitions occurring in the marketplace. Such products development efforts are often embryonic and can be “disruptors or game changers” in the best of circumstances.

    Market leaders and major suppliers need to plan for product obsolescence and anticipate changes in the markets that they serve.  Continuing to “leap-frog” the competition through the introduction of next-generation coatings is an effective tactic for fending-off share encroachment from competitors. In dynamic markets, where there are unmet needs or transitions occurring that require new products, the path forward often centers on new product development. As growth markets begin to mature, the competitive environment becomes more crowded and there is less differentiation in performance between suppliers. Without a “next generation” product to stay ahead of the competition, differentiation strategies increasingly rely on items like technical support, total process cost-of-ownership, local supply/JIT, distribution, etc. to support and protect market position.

    For entrepreneurial companies and start-up ventures, the strength of their business strategies is in the uniqueness of their products/technologies or services in relation to existing market standards. In these cases, the level of differentiation from the norm needs to be significant in order to provide a strong value proposition to the end-user. The more successful entrepreneurial companies often narrow their business focus, targeting those individual market applications and account targets where they can maximize resources while addressing time-to-market realities.

    During the growth cycle, quality technical service and application engineering support, directed at individual customer needs, is a very important differentiator between suppliers. Product line configurations, substrate types coating application equipment and the overall production process all impact the way coatings perform in service. With new products, each of these elements frequently determines which products work best.

    Suppliers who understand the nuances and unique aspects of a customer’ production line and can then adapt their product implementation plan to address these needs differentiate themselves. These suppliers often succeed when other suppliers fail.

    As markets begin to mature it is the knowledge and relationships gained through the understanding of customers’ individual manufacturing operations that also helps protect the business relationship with customers. Just as important, it is this knowledge that allows an incumbent supplier to guide next-generation products that refresh their supply position. 

    Access and strength in the channels-to-market is an important aspect of a successful business strategy. In volume markets, such as OEM coatings, direct sales support is required. At the same time, JIT requirements bring in to play the importance of regional supply through local warehousing and distribution. Unique coating products that deliver identifiable performance advantages may not be commercially viable without the accompanying resources and the appropriate channel-to-market strengths.

    Adequate channel-to-market positioning strongly favors the major coating suppliers when addressing main-steam, volume market applications. Entrepreneurial companies with new, exciting innovations need to take into account the impediments they face in targeting certain markets where the channel-to-market is controlled by the
    major manufacturers.

    Alternatively, niche markets or smaller, less structured coatings market segments become more accessible and better opportunities for entrepreneurial companies with a novel if not ‘game changing” products. In these situations, it is during the embryonic phase of strategy development and implementation that the viability of the selected target markets needs to be assessed. Implementing a successful, differentiated market introduction strategy in one or more of these market spaces requires careful consideration of the channel-to-market requirements that are needed to be successful. For smaller, entrepreneurial companies, this analysis often dictates eliminating some markets in the beginning.  Focusing on those market applications and specific accounts that fit within the resources and capabilities of the company to supply the end-user increases the chance for success. As these products mature, the value of having a strong position in the channels-to-market does not diminish.

    In the context of “Porter’s marketing positioning” concept, the market leader is one that holds the largest share of a market and with the highest margin. Market leaders have favorable purchasing power and complimentary brand strength. As market leaders, the challenge is to retain and strengthen this leadership role as the market proceeds toward maturity. Tactical introductions of next-generation products to fend-off competitive in-roads is a privilege of the market leader.

    As markets grow and move toward maturity introducing product improvement that brings net operational cost savings to their customers is a very important tactic. Adding complimentary products and services that strengthen the company’s ability to provide process solutions to the customer becomes an important differentiator.

    The market challenger is one that has lower margins and significantly less volume (typically 20% or less) than the market leader. Market challengers need differentiation in their product offerings to support an aggressive approach to growing their share. Depending on the strength of their product differentiation story, market challenges are put in the position of being price aggressive. Market challenger, however, also look for other elements of differentiation such as technical support or strategies related to the channels-to-market they employ to gain advantages over the market leader. In this scenario, market challengers have their greatest success as the market is experiencing early to strong middle-life-cycle growth. As the market begins to mature the opportunities to gain share from the market leader begin to diminish.

    Market niches possess a strong, differentiated product/technology advantage in focused or narrow market application areas. They provide uniqueness in both their products and in their market expertise. These elements provide separation for such companies from other competitors. The result is that market niches have the highest profit margins and the strongest brand strength within specific market applications. Market niches need to set-the-table early in the product life cycle establishing and then building a differentiated identity for their company. Without this strength, they become a target for the market challenges and the market leader. 
    Related Searches
    • environment
    • coatings
    • eliminating
    • additive
    Suggested For You
    Call for Papers for the International Coatings Congress (ABRAFATI 2019) Call for Papers for the International Coatings Congress (ABRAFATI 2019)
    AkzoNobel Developing Coatings That AkzoNobel Developing Coatings That 'Paints Itself'
    JNS-Smithchem Launches New Website with Expanded Services JNS-Smithchem Launches New Website with Expanded Services
    Hempel Launches New Antifouling Solution Hempel Launches New Antifouling Solution
    Readco Unveils Tabletop Continuous Processor Sized for Labs Readco Unveils Tabletop Continuous Processor Sized for Labs
    LORD Corporation Increases Rubber Adhesive, Specialty Chemical Prices Globally LORD Corporation Increases Rubber Adhesive, Specialty Chemical Prices Globally
    Buckman Increasing Prices in North America Buckman Increasing Prices in North America
    Powder Coatings Market Continues to Innovate Powder Coatings Market Continues to Innovate
    BASF Temporarily Stops TDI Production in Ludwigshafen BASF Temporarily Stops TDI Production in Ludwigshafen
    Oxea Declares Force Majeure for Individual Product Groups Oxea Declares Force Majeure for Individual Product Groups
    Powder Coatings Industry: The Focal Point Of Technical Innovation Powder Coatings Industry: The Focal Point Of Technical Innovation
    The Waterborne Symposium Announces Statistical Design of Experiments Course The Waterborne Symposium Announces Statistical Design of Experiments Course
    Nanoparticles Under Regulatory Scrutiny Nanoparticles Under Regulatory Scrutiny
    MEDIA & MILLING Directory MEDIA & MILLING Directory
    Clariant Delivers Further Progression in Sales, EBITDA in the First Nine Months of 2018 Clariant Delivers Further Progression in Sales, EBITDA in the First Nine Months of 2018

    Related Business Corner

    • Value Sectors and their Relationship  to Business Positioning

      Value Sectors and their Relationship to Business Positioning

      ...
      Gary Shawhan, Chemark Consulting 01.11.21

    • Assessing the Impact and Potential Consequences of COVID 19 Across the Asia Pacific Region

      Assessing the Impact and Potential Consequences of COVID 19 Across the Asia Pacific Region

      ...
      Dan Watson & Gary Shawhan , Contributing Editors 10.08.20

    • Leadership Styles

      Leadership Styles

      ...
      Phil Phillips, PhD and Gary Shawhan, Chemark Consulting 09.07.20


    • Persuasive Selling

      Persuasive Selling

      ...
      Phil Phillips, PhD & Gary Shawhan, Chemark Consulting 08.10.20

    • Impact of COVID-19 on  Coatings Industry, Business Climate  in China and Asia Pacific Region Update

      Impact of COVID-19 on Coatings Industry, Business Climate in China and Asia Pacific Region Update

      Coatings World Interviews Dan Watson of Blairgowrie Associates Part 2
      Gary Shawhan, Chemark Consulting 07.06.20

    • An Update on the  Impact of Covid 19  on Business Climate in China and the  Asia Pacific Region

      An Update on the Impact of Covid 19 on Business Climate in China and the Asia Pacific Region

      Part 1 – CHEMARK Interviews Dan Watson of Blairgowrie Associates
      Gary Shawhan, Chemark 06.15.20


    • Challenging Your New Products Ideas:  Decision Making Considerations (Part I)

      Challenging Your New Products Ideas: Decision Making Considerations (Part I)

      New products and innovative technologies represent the promise of opportunity for revenue growth for a company.
      Gary Shawhan, Chemark Consulting 04.15.20

    • Sales Force Compensation in Today’s Market

      Sales Force Compensation in Today’s Market

      ...
      Gary Shawhan, The CHEMARK Consulting Group 03.13.20

    • Market Research - An Important Management Tool

      ...
      Gary Shawhan, The CHEMARK Consulting Group 02.19.20


    • M&A - Engaging Outside Services During  the M&A Process (Part 2 of 2)

      M&A - Engaging Outside Services During the M&A Process (Part 2 of 2)

      ...
      Gary Shawhan , The CHEMARK Group 01.20.20

    • EU Poison Center Notification –  Time to Make Sure You’re Prepared

      EU Poison Center Notification – Time to Make Sure You’re Prepared

      ...
      Ray Rex, CRC-US & Gary Shawhan, Contributing Editors 12.11.19

    • Is The China-U.S. Trade War Over or Just Beginning?

      Is The China-U.S. Trade War Over or Just Beginning?

      ...
      Dan Watson , Contributing Editor 11.11.19


    • Vitracoat- an Interview with Steve Houston

      Vitracoat- an Interview with Steve Houston

      Vitracoat has expanded operations across multiple continents and is ranked amongst the top powder coating manufacturers in the world.
      Gary Shawhan, Contributing Editor 09.30.19

    • M&A – Understanding the Dynamics for Buyers and Sellers (Part 1 of 2)

      M&A – Understanding the Dynamics for Buyers and Sellers (Part 1 of 2)

      ...
      Gary Shawhan and Phil Phillips, The CHEMARK Consulting Group Contributing Editors 08.09.19

    • The Economics of Carbon Capture Coatings

      The Economics of Carbon Capture Coatings

      ...
      Phil Phillips, Contributing Editor 07.03.19

    Trending
    • AkzoNobel Proposes To Acquire Tikkurila For €31.25 Per Share
    • LANXESS Acquires Biocides Specialist INTACE
    • AkzoNobel Announces Share Buyback
    • Nouryon Renaming Industrial Chemicals Subsidiary Nobian
    • Raw Material Price Increases Pile Pressure On Paint Manufacturers
    Breaking News
    • Huntsman Finalizes Acquisition of Gabriel Performance Products
    • PPG Completes COLORFUL COMMUNITIES Project at School in A. Bangsaothong Samutprakarn, Thailand
    • Axalta Schedules Q4, Full Year 2020 Earnings Conference Call
    • Datacolor Introduces High-Efficiency Benchtop Spectrophotometer Series, Spectro 1000/700
    • LANXESS Acquires Biocides Specialist INTACE
    View Breaking News >
    CURRENT ISSUE

    January 2021

    • Additives Update
    • Pigment Supplier Directory
    • Interior Architectural Coatings
    • View More >

    Cookies help us to provide you with an excellent service. By using our website, you declare yourself in agreement with our use of cookies.
    You can obtain detailed information about the use of cookies on our website by clicking on "More information”.

    • About Us
    • Privacy Policy
    • Terms And Conditions
    • Contact Us

    follow us

    Subscribe
    Nutraceuticals World

    Latest Breaking News From Nutraceuticals World

    BGG Obtains U.S. Patent on AstaZine Natural Astaxanthin for Heart Function During Exercise
    Qualitas Health/iwi Raises $10 Million in Investment Round
    Aker BioMarine Expands Krill Portfolio with Novel Protein Hydrolysate
    Coatings World

    Latest Breaking News From Coatings World

    IGL Coatings Launches Graphene Reinforced Dual System Ceramic Coating
    Miller Paint Declares Simple Serenity its 2021 Color of the Year
    TAUBMANS Paint by PPG Releases ‘Chromatic Joy’ Palettes
    Medical Product Outsourcing

    Latest Breaking News From Medical Product Outsourcing

    CHF Solutions Appoints CEO
    Freehand Partners with Imperial Medial Solutions
    Intersect ENT Announces CMS Approval of Coding Application for Sinus Implant
    Contract Pharma

    Latest Breaking News From Contract Pharma

    Bone Therapeutics, Rigenerand Ink Cell Therapy Deal
    NovaQuest Private Equity Acquires CoreRx
    JS Bio and Etta Biotech Advancing Partnership
    Beauty Packaging

    Latest Breaking News From Beauty Packaging

    Marino Belotti Presents New Website
    Essence Cosmetics Expands in the U.S.
    Sigma Beauty Launches 'Brush Care' Sets at Sephora
    Happi

    Latest Breaking News From Happi

    Mix:Bar Launches at Target
    Crystal Deodorant Unveils Magnesium-Enriched Sticks
    Euromonitor Reveals Top 10 Global Consumer Trends for 2021
    Ink World

    Latest Breaking News From Ink World

    Cowan Graphics Adds Fujifilm Inca OnsetX3 HS
    Packaging Printing Market Worth $433.4 Billion by 2025: MarketsandMarkets
    O-I Foundation Gifts $50k to Facilitate COVID-19 Vaccine Access
    Label & Narrow Web

    Latest Breaking News From Label & Narrow Web

    Domino grows installation and service teams
    ABG keeps pace with demand with recruitment drive
    Acucote expands FSC-certified portfolio
    Nonwovens Industry

    Latest Breaking News From Nonwovens Industry

    Honeywell Delivered 225 Million Masks in December
    Techtextil, Texprocess Postponed to 2022
    Super Strong Inks Survive Tough Environments
    Orthopedic Design & Technology

    Latest Breaking News From Orthopedic Design & Technology

    Bioventus Appoints SVP of Operations
    DePuy Synthes Receives 510(k) FDA Clearance for VELYS Robotic-Assisted Solution
    OrthoPediatrics Expands Agent Network in Three European Countries
    Printed Electronics Now

    Latest Breaking News From Printed Electronics Now

    UDC Subsidiary Adesis' Website Wins 2020 MarCom Platinum Award
    Roadsimple Modernizes Warehouse Ops with Zebra Technologies
    Graphene Flagship Launches Redesigned Website

    Copyright © 2021 Rodman Media. All rights reserved. Use of this constitutes acceptance of our privacy policy The material on this site may not be reproduced, distributed, transmitted, or otherwise used, except with the prior written permission of Rodman Media.

    AD BLOCKER DETECTED

    Our website is made possible by displaying online advertisements to our visitors.
    Please consider supporting us by disabling your ad blocker.


    FREE SUBSCRIPTION Already a subscriber? Login