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Music to Our Ears Published: Sunday, March 29, 2015 By: Ulises Pabón, President

Guitar Center is the largest chain of musical instrument retailers in the world with 223 locations throughout the United States.  I recently spent some time at one of its outlets in Tampa, Florida.  For a guitar enthusiast, it’s like waking into a candy store.

I skipped the electric and the steal-stringed acoustics and went directly to the nylon-stringed classical guitar section.  I wasn’t planning on buying a guitar; I just wanted to experience strumming some of the top Spanish brands.  It’s not every day that you get the opportunity to play a Jose Ramirez or a ManuelRodriguez flamenco.  While the workmanship and sound of a Takamineor a Yamaha – both Japanese made – is respectable, laying your hands on a genuine Spanish guitar is a religious experience.

What I wasn’t ready for, was discovering the birthplace of the Cordova I had in my hands.  After testing about half a dozen guitars, without doubt, this was the smoothest to play.  The music it produced was superb and the workmanship outstanding.  You can imagine the look on my face when I peered inside the body and stared at the fine print on the label that read: Made in China.

I was appalled.  Convinced I had somehow misread the label, I did a second take, and a third take.  I knew about Cordova’s two workshops in Spain and its workshop in Portugal.  As for this beauty, Made in China, it was.  I decided to play the guitar again to discover its hidden flaws.  It was almost as if I didn’t want it to sound so good.  The dammed thing was flawless!  I hung it against the wall beside its fellow companions and walked out of the store, speechless.

As I drove back to the hotel, I struggled with what had just happened.  Had I been “punk’d” or was this a lesson on the power of paradigms?  Themes of competition and the longevity of value propositionscame to mind.  Or was this experience just a sample of stronger geo-political and economic tectonic shifts?

During the second half of the twentieth century, we witnessed how Made in Japan evolved from being a sign of cheap imitations to the benchmark of quality and workmanship.  Current projections place China as the largest economy in the world by 2020.  The $600 beauty I was tinkering with was evidence that Made in China wasfollowingon the footsteps of Made in Japan.

In a recent survey, business leaders were asked whether they considered their company offerings to be significantly different from their competitors’.  Eighty percent of respondents answered yes.  However, when customers wheresurveyed, only one in ten felt they were purchasing a unique and differentiated product or service.  The study looked at healthcare services, financial and insurance services, consumer electronics products, and food and beverage products.  The conclusion was consistent: consumers perceive they are being catered to with non-differentiated products and services.

This value-gap between what executives think and what customers perceive shouldn’t be taken lightly.  The general impression we get during strategy formulation exercises and strategic planning sessions is that business owners over-estimate the uniqueness of their value proposition.  When we press for evidence of the dramatic difference their value proposition carries and for clarity regarding the explicit benefit their offering delivers (these are two of the three “acid tests” we use to assess value propositions), silence prevails.

In business literature, the term “commoditization” refers to the process by which goods and services that have economic value and are distinguishable in terms of attributes (uniqueness or brand)end up becoming simple commodities in the eyes of the market or consumer.  The implicit assumption behind the term, though, is that when commoditization occurs, products drop to the low end of the value chain.

The Cordova guitar, however, is an example of a different kind of commoditization.  Here we have a high-end product, priced accordingly, doing to the Jose Ramirez and Yamaha of the world what Lexus did to BMW and Mercedes.

In today’s business world, value is king.  Think of it, 2020 is only eight years away!  For sure, we will all need to change the way we change.  For the first time in the modern era, a developing country (not a developed country) will become the largest economy in the world.  And the repercussions will be felt on our shore.

Intimidating? Perhaps.Challenging?  No doubt.  Paralyzing?  Never!  The time to master the art of creativity and innovation is now.  The moment for reinvention is now.  The time to embrace change is now.  Innovation, reinvention, change; let these all become “music to our ears”.


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