What is a commodity?

A commodity is a situation that occurs when a consumer cannot tell the difference between two products. In this case they naturally chose the cheapest - as functionally their needs have been met.

Companies that make commodities naturally have a low cost strategy and are in a race to the bottom. It makes sense therefore for companies to try to differentiate their products at all costs. Take chocolate for example, if your functional needs are just a chocolate bar there are plenty on offer. A look at the manufacturers marketing shows information for different ingredients, differing purity etc. All trying to stop you from simply picking the cheapest.

Over-serving users

For any feature/need that a user deems necessary to fulfil their job to be done, once it becomes easy for a company to over-serve this need commodities sink in. It is hard to be differentiated when being good enough is so easy.

Any further innovation is pointless once past this line of ‘good enough’ as the user cannot consume it and does not value it.