Can you too deliver more for less?

Value players will probably challenge your company.

Value-driven competitors have changed the expectations of consumers about the trade-off between quality and price. This shift is gathering momentum, placing a new premium on - and adding new twists to - the old imperatives of differentiation and execution.

Companies offering the powerful combination of low prices and high quality have always and shall continue to capture the hearts and wallets of consumers of your products and/or services. The market share gains of value-based players give their higher priced rivals definite cause for alarm.

Many mainstream companies now face steep cost disadvantages and lack of product superiority that once set them apart from low priced competitors. Today, as value-driven companies in a growing number of industries move from competing solely on price to catching up on attributes such as quality, service, and convenience, many traditional players rightfully feel threatened.

Substantial opportunities remain for value players to continue seizing market share not only in industries where they already compete but also in additional ones. Given their effect on National economic performance, policy makers and economists will want to play heed as well.

After years of near-exclusive sway over all but the most discount-minded consumers, many mainstream companies now face steep cost disadvantages and lack of product superiority that once set them apart from the low-priced competitors. To compete with value-based rivals, mainstream companies must reconsider the perennial routes to business success: keeping cost in line, finding sources of differentiation, managing prices effectively. Differentiation, for example, becomes less about the abstract goal of rising above the competitive clutter and more about identifying opportunities left open by the value players' business models. Effective pricing means waging a transaction-by-transaction perception battle to win over consumers pre-disposed to believe that value-oriented competitors are always cheaper.

Two strengths underlie the growing power of value players in the consumer market. The first is an impressive cost advantage rooted both in industry specific sources and in relentless execution. The value player's second strength is a shift in consumer perception of the quality they offer. This positive perception characterizes buyers from all consumer segments, even those for which quality is more important than price.

Value players attract swarms of customers with a winning combination of low price and "good enough" quality. These large volumes of customers often translate into superior productivity - higher sales per square foot in retailing or per employee in technology for example. They also generate an economic surplus that many value players use to cut prices and raise quality even more.

This virtuous circle- more customers, more productivity, better economics- generates bona fide opportunities for value players to move into new products and service categories.

Competitors lacking comparable productivity are then forced to reduce their product or service standards or suffer a widening price gap, reinforcing the value players' edge.

The ubiquity and rapid expansion of value players across markets and geographies raises important questions for any sector. If your company has not already "gone to value," will it do in the near future? If the processes have already begun, how much of your business is at risk?

As competition becomes increasingly about differentiation and execution, CEOs will have to focus their organisations on rapid experimentation and innovation, the development of superior customer insights, effective pricing and promotions, and frontline efficiencies. The big challenges will be diagonising where a company's capabilities fall short and then building these skills quickly.