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What is a commodity?

What are commodity products? What's important to know about them in the context of a case?

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Ken
Coach
on Jul 20, 2021
Ex-McKinsey final round interviewer | Executive Coach

A product with little differentiation which often drives down the price, or the ability to charge a premium. For example, any consumer product that you can buy non-branded could be a commodity product, e.g., toilet paper, aspirin, some would even say an airline ticket, etc.

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Ian
Coach
on Jul 20, 2021
Top US BCG / MBB Coach - 5,000 sessions |Tech, Platinion, Big 4 | 9/9 personal interviews passed | 95% candidate success

Hi there,

A commodity is one in which there is perfect competition. There are many players and products are not differentiated. As such, you cannot set your price, and therefore you can primarily only compete on volume and on cost. (Important for a case)

Oil, gas, corn, water, etc. are all commodities!

Deleted user
on Jul 20, 2021

So much literature on this is available online..you can easily self learn :)

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