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David W. Cravens: Eunice and James L. West Chair of American Enterprise Studies, Texas Christian University, Fort Worth, Texas, USA
Nigel F. Piercy: Sir Julian Hodge Chair in Marketing and Strategy, Cardiff University, Cardiff, UK
Ashley Prentice: Staff Consultant, Ernst & Young LLP, Houston, Texas, USA
Strategies built around pivotal products. Notwithstanding the topical importance of relationship marketing processes, customer satisfaction management and supply chain collaborations to control logistics, it is apparent that many companies build strategies around pivotal products. Companies such as Coca-Cola and Intel formulate their strategies around key products in their portfolio. Recently, several important trends have emerged in the marketplace such as the blurring of market boundaries, escalating customer diversity, and increasing global competitive threats. These trends create an impetus for executives to develop and adopt market-driven product strategies, which are integrated with relationship and supply chain strategies, to deliver superior customer value.
Dell Computer's direct to the customer, build-to-order business design demonstrates the positive impact of product strategy on corporate performance. This successful strategy highlights the critical need to identify and examine the strategic initiatives that may impact product strategies. Dell pursues a growth strategy by offering customers next generation products faster than the competition. The company's growth since its launch in 1984 has been impressive. 1999 sales were over $25 billion. Management understands computer buyers through Dell's very effective market-sensing processes. Strategic relationships with suppliers and customers offer flexibility in responding to competitive pressures and leveraging partners' distinctive capabilities. Dell positions these capabilities to meet customers' value requirements. The power of the Dell business model was underlined early in 1999, when IBM agreed to a $15 billion technology collaboration rather than to continue to compete head-on with Dell. Building strong brand equity and facilitating strategic brand management are important corporate priorities.
Although successful companies face unique competitive challenges, there are several important strategic dimensions that all executives need to assess in developing and managing effective market-driven product strategies. Our objective is to develop an action agenda consisting of the eight strategic dimensions shown in Figure 1. Executives can use this template to examine their organizations' product strategies critically. All of the dimensions may not apply to every organization, yet many are applicable to a wide range of industries and...