book on the topic to be particularly enlightening.
By his reckoning commoditization is not, as some are fond of suggesting, a one-way march to a dead end where all products are reduced to the preferences of the lowest common denominator, but a cyclical occurrence in consumer markets that persists so long as customers have need of a product.
It begins simply enough, with one firm offering a new product to customers with an attitude of "take it or leave it," and then panics when customers decide to leave it for products that better suit their needs. What ensues thereafter is a constant struggle among competing firms to suit specific segments of the market, offering the benefits they value at a price they are willing to pay. It doesn't end until a greater change takes place in the environment: customers have the same basic needs as they ever have, but merely find a different way to satisfy them.
That struggle in the middle presents an ongoing cycle of commoditization, which is not a terminal toward which markets progress, but which merely a lull (sometimes brief, sometimes quite long) during times when customers are complacent with a limited number of options and firms become entrenched in providing them, assuming that they will never change ... until they do. The cycle has repeated throughout history, and it always seems to take them by surprise.
The book itself identifies three different forms of commoditization (deterioration, proliferation, and escalation) as well as three different strategies that firms can use in response to each situation (escape, destroy, or exploit) - which gets a bit tedious at times, and I can't help wondering if it's quite comprehensive. But all in all, it's an interesting set of considerations that makes the phenomenon of commoditization a lot less monochromatic, and a lot less daunting.