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1.3 The Entrepreneur Should Design Products and Services for Continuous Product Differentiation and Innovation

Developments in economics, marketing, operations management, and information technology have now brought the vision of customization and personalization to reality.Arora et al. (2008). Consumers want products and services tailored to their personal needs, but they also want products that are standardized, mass produced, and inexpensive. It is possible to assemble products and services using standardized processes and standardized modular components and still achieve product differentiation. Autos, global positioning systems (GPSs), tax software, operating systems, refrigerators, and so forth are all designed so that features and performance can be easily added and subtracted. The key principle in designing products and services is to design for flexibility and to continuously improve those products and services. This is the essence of a product differentiation strategy and the only way to survive under monopolistic competition.