Acme’s Business Model: From Commoditization to Beyond Precision
Many businesses today struggle with the unavoidable force of commoditization that pulls competing products and services down into sameness until price determines customers’ choices. Escaping the pull of commoditization was possible for Acme Industries, but it required us to examine our business model strategy, not only from our own perspective but also that of our customers and prospects. Our goal was to differentiate Acme Industries from competitors and to accelerate our customers’ success as a result of using our services.
In the past, Acme Industries was too often treated as a commodity where quality and delivery of complex, precision machined parts were a given for all competitors, therefore, price was the only criteria for prospective buyers to make supplier decisions. In fact, acceptance of that view is the wrong one by either the OEM or us. Quality and delivery are not a given in the industry and there are many other elements that should be considered when the OEM makes its choice of which suppliers are the best ones to award their business.
The first step in transforming Acme Industries’ business model was doing a thorough, in depth interview with our current customers and prospects to understand their business better and determine what they needed from their suppliers to optimize marketplace success. From that assessment, Acme realized that it already had the capability, and in some cases could demonstrate past performance, to deliver on an enhanced value promise to its customers. The second step was to define the targeted companies and positions within those companies that would appreciate an enhanced value promise and realize the strategic importance of that in their purchasing decisions. The third step was to develop a clear and concise value promise that would clearly make us essential to Acme’s OEM customers and that Acme could believably commit to, align against, and execute day in and day out. The final step was to communicate the value promise through key messaging and schedule meetings with the targets to explain the potential deliverables that were not commodities and the value of them to the OEM.
Examples of how Acme Industries has delivered Beyond Precision solutions to our customers can be found in our case study section. Communicating these examples of increasing the success of our customers has helped others understand that our services are not limited to delivering precision parts. The best part of transforming Acme Industries’ business model from commoditization to Beyond Precision has been the benefit to our customers from Acme’s increased focus and ability to accelerate their success.