Within walking distance of where I have been staying, there are two kosher shawarma stands across the street from each other.
Both offer outstanding flavours, fresh pita, an array of unlimited salads and toppings, and I have enjoyed each one on different occasions.
One is a classic outdoor spot, a street corner “temporary” structure that was built decades ago; the other is inside a newly renovated shopping mall, with 2 different types of meat offered, food court tables, trays, bright lights and a website.
The outdoor spot charges about 25% less. Both spots have a steady stream of customers from 11:30am until closing, selling out each day.
Clearly, each has staked out its own market, with one targeting those willing to pay the premium for the comfort of indoor seating and the more upscale ambience (if such a phrase can be applied to a shawarma stand).
Years ago, I wrote about differentiation in the coffee business, how some companies have found ways to increase revenues in a commodity industry.
At this time of year in Israel, bakeries have elevated donut making to an art form, such that people will pay more than $10 for a single sufganiya at a premium coffee shop, more than the cost of a dozen at the local grocery store bakery.
Why wouldn’t we expect similar differentiation in the telecom industry?