The New Law of Demand and Supply

A groundbreaking business book for the twenty-first century,The New Law of Demand and Supplyoverturns 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...
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A groundbreaking business book for the twenty-first century,The New Law of Demand and Supplyoverturns 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. InThe 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 emergingdemandexists 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 andpermanentlychanged 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 Corporationbrought about a sea change in the way companies were run. Now,The New Law of Demand and Supplyredefines the ground rules of today’s economy and gives managers the tools they need to outperform the competition and achieve dramatic growth and profits. From the Hardcover edition.