Designing Out Partners
Create and commoditize partnerships
The Designing Out Partners framework involves creating partnerships to establish a whole product, then commoditizing those partnerships to reduce costs and increase efficiency. This strategy prioritizes market share and profitability over partner relationships.
- Create partnerships to establish a whole product
- Commoditize partnerships to reduce costs and increase efficiency
- Prioritize market share and profitability over partner relationships
- Recruit partners to create a whole productIdentify potential partners and create a whole product that meets customer needs.Pro tipFocus on creating a seamless user experience and reducing distribution frictionWarningBe aware of the potential for partners to become competitors
- Institutionalize the whole productEstablish the whole product as the market leader, then commoditize it to reduce costs and increase efficiency.Pro tipUse marketing and sales efforts to promote the whole product and establish it as the standardWarningBe prepared to adapt to changing market conditions and competitor strategies
- Commoditize the whole productReduce costs and increase efficiency by commoditizing the whole product.Pro tipFocus on reducing distribution friction and increasing customer adoptionWarningBe aware of the potential for commoditization to reduce profit margins
Microsoft's partnership strategy
Microsoft has used partnerships to establish itself as the market leader in the software industry.
OutcomeMicrosoft has maintained its market leadership and continued to grow its market share.
Intel's commoditization strategy
Intel has used commoditization to reduce costs and increase efficiency in the microprocessor market.
OutcomeIntel has maintained its market leadership and continued to grow its market share.
Not adapting to changing market conditions
Failing to respond to changing market conditions and competitor strategies can lead to loss of market share and profitability.
Not prioritizing market share and profitability
Failing to prioritize market share and profitability can lead to loss of market leadership and reduced competitiveness.
This strategy is based on observations of successful companies in high-tech markets, such as Intel and Microsoft, which have used partnerships to establish themselves as market leaders.
Source · BOOK
Inside the Tornado: Marketing Strategies From Silicon Valley's Cutting Edge