Malstrom responds to Wii price cut.

[liquidninja]

“While supply is on the rise as global competition intensifies, there is no clear evidence of an increase in demand worldwide, and statistics even point to declining populations in many developed markets.

“The result has been accelerated commoditization of products and services, increasing price wars, and shrinking profit margins. Recent industrywide studies on major American brands confirm this trend. They reveal that for major product and service categories, brands are generally becoming more similar, and as they are becoming more similar people increasingly select based on price. People no longer insist, as in the past, that their laundry detergent be Tide. Nore will they necessarily stick to Colgate when Crest is on sale, and vice versa. In overcrowded industries, differentiating brands becomes harder in both economic upturns and downturns.

“All this suggests that the business environment in which most strategy and management approaches of the twentieth century evolved is increasingly disappearing.”

-Blue Ocean Strategy, page 8.