Businesses today operate in one of two broad categories:
The boutique market, where companies offer customers high levels of customer experience and support, but restrict their distribution into the marketplace
The commodity market, where companies severely limit customer support but attempt to maximize their distribution
The difference in quantity and quality of customer support and purchase experience encourages consumers to search for suppliers that provide both consistent quality of support and distribution reach. Smart companies recognize this and respond by creating a recognizable brand or franchise.
Businesses commonly use aggressive practices dubbed “transaction economics” which are business relationships comprised of a series of unique transactions between sellers and buyers. Each sale or purchase is self-contained and complete. As a result, each transaction occurs as if it has no historical or future context. From the seller’s perspective, creating value (shareholder wealth) can be defined as maximizing the potential value in each transaction.