A groundbreaking business book for the twenty-first century, The New Law of Demand and Supply overturns the traditional supply-side approach to how business is done, showing why a demand-based approach is essential to success in today’s economy.
For more than two hundred years, companies have based their approach to business on supply-side economics, concentrating on creating products and services and then attempting, through marketing, publicity, distribution and promotion to stimulate a demand for them. While most companies have factored in customer feedback, focus groups, and broad-based market research, their basic approach has remained the same. And it is a mistake. In The New Law of Demand and Supply, Cambridge Group CEO Rick Kash argues that in order to succeed in today’s market, companies must reverse their approach by first determining what current and emerging demand exists and then by creating products and services to meet that demand.
For a host of reasons–from the reduced life cycles of products and services, to deregulation, to increased competition as a result of globalization, to the ability of customers to compare prices and values at a keystroke–the market, Kash argues, has fundamentally and permanently changed from one that is driven by supply to one that is driven by demand. Traditional businesses that remain locked in a supply-side mentality are doomed to failure. Today’s most successful companies, from McDonald’s to IBM, from EMC to Pepsi-Cola, use the principles of demand strategy to first understand all the factors that go into creating demand in their targeted markets, as well as what their emerging needs will be in the future. In the heart of the book, Kash outlines a specific six-step demand strategy on how to implement a demand-first approach–from homing in on who your most profitable customers are to determining what needs they have (whether articulated or not) that are not currently being addressed. Using that information, companies can create unique products that are differentiated from their competitors’ to meet those demands. Rather than being forced to compete on price, they can trump the competition by competing on value, offering the options, features, products, and services that better meet an existing demand. As a result, companies often can actually charge more for what they produce and improve their margins. Diving under the hoods of a score of successful Fortune 500 companies that have made demand strategy central to the way they do business, including Gatorade, Capital One, Sara Lee, and Sears, Kash details how these companies have used this strategy to re-create their businesses.
Ten years ago, Reengineering the Corporation brought about a sea change in the way companies were run. Now, The New Law of Demand and Supply redefines the ground rules of today’s economy and gives managers the tools they need to outperform the competition and achieve dramatic growth and profits.
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Rick Kash believes supply-side economics has reached the end of its effectiveness, and in The New Law of Demand and Supply he argues for an inverse approach--one he contends is already employed to some degree by many of the world's most successful companies. Kash, CEO of The Cambridge Group consulting firm, uses some of these organizations--such as Gatorade and Sears Credit--to illustrate the concept of demand strategy he proposes to meet these new-world needs. Based on "thoroughly understanding existing and future demand and only then creating the supply to satisfy it," the approach is fully described in chapters devoted to each of its six phases. "Analyze the demand forces and industry factors impacting your business," for example, is a logically presented first step that calls for a wide focus on external elements like demographics, competitors, societal trends, the economy, legislation, and technology. Next comes "Select your most profitable demand segments," advocating a careful search for areas that match your capabilities but can be differentiated from the offerings of others. Subsequent steps (develop a "demand value proposition" that elevates you above the crowd, identify ways to realize this agenda, allocate necessary resources, and execute) are likewise explained thoroughly. The result is an intriguing platform with planks that are potentially applicable in a multitude of situations. --Howard RothmanFrom the Back Cover:
"It is said that timing is everything in life -- but so is sequence, tackling things in their right order. The book you're holdling makes a powerful case for thoroughly understanding demand before creating supply. A concept too obvious to merit book-length treatment? Current business history says otherwise. All too many companies suffer from this sequence problem. Or else they greatly underestimate the holistic approach needed to stay glued to constantly morphing demand. In the business book market, substitutes abound. The New Law of Demand and Suppy is an exception."
--Mike Ruettgers, Executive Chairman, EMC
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