Technological Innovation is Key in Competing with Low-cost Manufacturers
A similar situation exists today in the ceramic tile industry. Leading ceramic tile manufacturers are investing large amounts of their resources to develop innovative new technologies for ceramic tiles, in an effort to advance consumers' ideas about what tile is capable of. Several companies have recently introduced new anti-slip technology in which seemingly smooth surfaces are chemically transformed into non-slip surfaces when touched by water. This is just one of several new technological innovations to enter the ceramic tile industry recently.
A recent exhibit at Cersaie 2005, the Cumulus Design Competition, featured innovative new applications for ceramic tile, including moving tiles that allow building structures to changes shape, shadow tiles that modify light dynamics, and solar tiles that collect sunlight and store it in photovoltaic cells for later use. Although these examples are only in the conceptual stage at this time, it probably won't be long before these concepts become a reality.
By shifting consumer attitudes toward tile, the leading ceramic tile manufacturers may be able to avoid the commoditization of tile that results from competition based solely on pricing. This was part of the strategy outlined by Assopiastrelle President Dr. Alfonso Panzani in a recent interview which discussed Italy's response to increasing competition from China and other low-cost tile manufacturing countries.
Confronted with rising manufacturing costs and increased competition in the global market, Italian manufacturers are hoping to avoid competitive pricing by offering more innovative and specialized products, for which consumers would be willing to pay more. If the strategy pays off, other leading manufacturers will likely follow suit, leaving the low-end commodity products to Chinese and other low-cost manufacturers. Forward-thinking companies would do well to heed the example of Ford and GM, and focus as much as possible on future technologies. Whether it is for automobiles or tiles, consumers have shown that they are willing to pay more for value-added features.