The essay should summarize 'The Long Tail,' which recommends selling varied niche products, and 'The Innovator's Dilemma,' which promotes adopting disruptive technologies. RaumCo could use these strategies to diversify their product range and embrace new innovations to create competitive advantage and increase sales, while also optimizing their cost structure for profit maximization.
The student has requested an essay summarizing The Long Tail by Chris Andersen and The Innovator’s Dilemma by Clayton Christensen. The Long Tail explores how businesses can thrive by selling a large number of unique items to a smaller market, as opposed to focusing on selling a small number of popular items to a big market. In contrast, The Innovator’s Dilemma addresses how established companies can maintain their dominance in the face of disruptive technologies by adopting a more agile approach to innovation.
RaumCo, as a provider of high-quality stereo equipment, could leverage The Long Tail strategy by diversifying its product range to offer highly specialized and niche products online to cater to a wider range of customer interests. Additionally, following principles from The Innovator’s Dilemma, RaumCo could look for disruptive innovation within the audio industry and either develop or adopt new technologies early on to gain a competitive advantage and increase sales.
Incorporating these strategies could potentially allow RaumCo to both reduce costs by minimizing inventory expenses and widen their market by appealing to various customer segments all over the globe. Understanding and analyzing the firm’s cost structure with a focus on fixed and variable costs, along with average total cost, average variable cost, and marginal cost, would also help RaumCo in making profit-maximizing decisions.