Wednesday, April 9, 2014

Personalization of Business: Trend or Lasting Competitive Edge?

If you're ever casually reading information on e-commerce and more generally on new brand strategies that companies undertake, you'll see tons of information on personalization. This article speaks to the increased personalization of web presences (including the specialized use of images to create individual brands)- and they're not the only one talking about it. Another article cites personalization as a key component of marketing innovation. 

The idea is simply that, with a growing number of people that have grown up with their own cell phone, a Twitter, Facebook, Instagram etc. account showing the world "who they are", and fast-moving technology shifts, the demand of those customers for companies to provide just what they (themselves, individually) want, is high. Everything from cars to clothing can be bought online, with a completely personalized touch (seriously- go design your own Nike shoe here). People use their social media accounts to not only hold companies accountable- but to tell them what they like and don't like. Subtly, the world's young consumers seem to be shifting how brands in certain industries work, and how they examine customer demand.

3-D printing enables this in a big way-- not only can people design and make their own things, but entire businesses are being built around assisting smaller online businesses customize products for customers. DYO is a place where you can personalize jewelry.

Alright, so hopefully, I've convinced you. Personalization is, for the moment, here to stay. We don't need replaceable parts/standardization- because we can cheaply make a unique [insert noun here: gun, chair, medical device, etc.]. Businesses are following the personalization trend in one sense: to quantify demand. But are they also following it in another? Are cues- like the thrust of strategy articles on differentiation and tailoring your business to your strengths/capacities- telling us that instead of seeking a standardized business model, companies are following the personalization trend? While there may not be a very "standard business" -- don't the majority of large and medium firms follow a standard business protocol? (And don't many fail because they fail to recognize that what works for their competitor will not work for them?)

So then, are we coming to an era in which companies ACTUALLY personalize their strategy? (If they're people in the eyes of the court, we can use the word "personalize", right?) Or is this something that only a handful of firms are actually doing to any real extent?  My hypothesis is that the majority of companies of a certain scale, regardless of talk of vision, values, etc. find it very difficult to do this task. Or perhaps don't really think it's useful, despite what studies state. I would also hypothesize that there may be an issue with causation: is it the company that pays attention to these issues and the idea of continual improvement that then personalizes, and that type of company in general is just going to be more profitable? Or that the act of personalization of strategy actually makes the company better? 

What do you think? Is strategy personalization a trend? Or a lasting competitive edge that companies will have as long as they stay true to their strategy, and continually re-evaluate its effectiveness with who they are as a company?

General Sources (not linked above): 
Leinwand, Paul,  Mainardi, Cesare. (2010).The Coherence Premium. HBS No. R1006F. Boston.
Harvard Business Review. (2006). Types of Strategy: What Fits Your Business Best?. HBS No. 5559BC. Boston.

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