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Feature Proliferation 23 May 05
Q. What do the following products have in common?
All of them are embodiments of “feature proliferation,” in which each generation of a product adds additional bells and whistles in an attempt to beat out its competition.
As technology makes more features possible, these products reflect the belief that more is better. This is a very widely-held belief – judging from recent new product offerings, most companies would subscribe to some version of it.
Now, several researchers are telling us that sometimes less is more. Two recent articles in the Harvard Business Review argue that some companies are over-providing new features – in effect, they’re innovating in the wrong areas.
This feature inflation may do a dis-service to customers by adding needless complexity. Because it is frequently unprofitable, it does a dis-service to stockholders as well.
Feature inflation and the product life cycle
Youngme Moon, a professor at the Harvard Business School, sees feature inflation as a function of the product lifecycle. In most consumer products and services, as a product enters the more mature phase of the product life cycle, a company’s marketers will try to keep it “fresh” by adding new features. They assume that these additional features will have added value for customers.
Companies like IKEA, Commerce Bank, and JetBlue, on the other hand, drastically de-feature their offerings and succeed by emphasizing a few new attributes – providing better service, in the case of Commerce Bank, or in-store restaurants, in the case of IKEA furniture showrooms, or leather seats, in the case of JetBlue.
Feature inflation and red ocean strategy
Chan Kim and Renee Mauborgne, of the French Business School INSEAD, see feature inflation as the inevitable result of competitive benchmarking, in which companies are always comparing the features of their offerings to their competition. They call this approach a “red ocean” strategy, because when companies engage in this kind of feature war, it can get very bloody.
Their recommendation: pursue “blue ocean” strategies – find new customers and create new offerings to serve them.
n Cirque du Soleil brings sophistication and an adult sensibility to the circus, while other circuses compete for a young audience based on more and more thrills.
n Starbucks emphasizes atmosphere and taste, while other major coffee makers compete with each other on price.
Both Moon and Kim/Mauborgne propose a much broader view of product development than the one taken by most companies. They ask firms to look beyond features and technology to the ways in which their new products can attract new users.
Microsoft Xbox 360: paint it red?
It’s surprising how divergent these views are from those embodied in the current set of product offerings, in which features keep improving. Just this week, Microsoft unveiled the Xbox 360 (much to my son’s delight). This next generation game system, competing head-on with Sony, does more and does it better in what may turn out to be a classic example of a “red ocean” strategy.
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