Economics For Entrepreneurs – How to Create Differentiated Value in Seemingly Undifferentiated Markets

Economics For Entrepreneurs
Economics For Entrepreneurs

Jeremy Vesta is a partner in Vesta Holdings, and a manager of Harmony Beef, a greenfield start-up in the fresh beef industry. Fresh beef might be thought of as a commoditized industry. But new entrepreneurial thinking can bring profitable differentiation to all markets. Here are some highlights from our conversation.

Show Notes

What’s the entrepreneurial response if you are operating in a commodity-like market? A fresh beef processor stands in the middle of the production chain, downstream from the unprocessed inputs and upstream relative to the distributors, retailers and consumers. Some abundant products and services that are inputs to finished consumer goods are deemed to be commodities and subject to price competition — lowest price gets the contract. Market conditions like these can be very challenging for entrepreneurs, apparently leaving little room for the kind of value creation or brand building that will generate higher prices and customer loyalty. What’s the right entrepreneurial response?

Operational excellence is a primary pillar of value provision in commodity markets. Jeremy’s first foundational principle for value creation in his industry — fresh beef — is operational excellence. It is often overlooked as a source of value by theorists, but not by customers. When they can count on exactness in meeting specifications, when their preferred timing is respected, when the quantities they ordered are the quantities that are delivered, customers translate the reliability of promises kept into trustworthiness, and the integrity of contractual precision into relationship strength. Operational excellence is often underestimated as a source of customer value.

The same is true further up the production chain. When an operator exhibits excellence to upstream suppliers and vendors, they are reassured that they are selling into a waste-free and efficient partnership, without operating friction or relationship tension.

Meer Show Notes vindt u hier.

Duur: 47:23

Publicatie 28 mei