Definition
The Basis of Competition Evolution describes the shifting criteria by which customers choose one product over another as technology matures. When product performance “overshoots” what the market can absorb, the primary competitive differentiator moves through a predictable sequence.
Why It Matters
It predicts when a great product will lose to a good-enough one that is simply more convenient or cheaper. This evolution is the crystal ball for business, showing when to stop over-engineering and start focusing on ease of use.
Core Concepts
- The Buying Hierarchy (Four Phases):
- Functionality: Customers choose based on core task performance.
- Reliability: Customers choose based on dependability.
- Convenience: Customers choose based on ease of use or portability.
- Price: The product is a commodity; competition is on cost.
- Triggered by Performance Oversupply: The shift from one phase to the next is usually precipitated by the technology providing more performance than the customer needs.