The Relationship Between Environment and Value: Business Strategies Learned from Water
By examining the concept of value through the everyday resource of “water,” we can uncover perspectives essential for business success. In Japan, where water was once freely available, bottled mineral water has become widely accepted. Meanwhile, in many regions abroad where tap water is unsafe to drink, purchasing water is standard practice. This “variation in value due to environment or location” offers valuable lessons for business strategies.
The Essence of Business Seen Through the Changing Value of Water
1. Value Is Determined by the Balance of Supply and Demand
In regions abundant with water sources, water is inexpensive, while in arid areas like deserts, it commands a high price despite limited availability. This phenomenon directly aligns with the “market principles” of the business world.
- Example: Demand for Advanced Technology
In emerging markets where internet infrastructure is insufficient, communication services and internet equipment are in high demand, even at high prices. Conversely, in regions with well-established infrastructure, companies face price competition and must offer additional value to stay competitive.
2. Adapting Value to the Environment
Businesses must tailor their value propositions to suit the environment or market they serve. For instance, in Japan, the focus for water is on branding it as “safe and delicious,” while in some regions abroad, the absolute value lies in providing “clean and safe water.”
- Example: Luxury Brands
Brands targeting high-income consumers often emphasize the “sense of exclusivity” in owning their products rather than just their utility. Similarly, the “value” of a product changes significantly based on the consumer’s needs and environment.
Business Strategies Leveraging Value Differences by Environment
1. Marketing That Capitalizes on Regional Characteristics
To succeed in business, it’s vital to redefine value according to the local environment or market.
- Just as water’s fundamental importance varies by region, products must be localized to address unique needs in different markets.
2. Positioning Products as Either Necessities or Luxuries
The approach to offering a product as a necessity or a luxury should depend on the location and target demographic.
- Subscription-based businesses, for example, thrive by providing “regularly needed value” in a sustainable way.
3. A Sustainability-Oriented Approach
In resource-limited situations, focusing on sustainability enhances value.
- Products or services leveraging renewable energy hold high value for environmentally conscious customers.
Business Success Principles Learned from the Example of Water
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Deeply Understand Market Needs
Just as water’s value shifts with environmental conditions, businesses must analyze and respond to the unique demands of each market. -
Offer Differentiated Value
Emphasizing distinct strengths—such as safety, taste, or brand value—enhances competitiveness. -
Adapt Flexibly to Change
Businesses must be agile in adapting their products or services to changing demands and environments.
Conclusion: Value Is Not Fixed
In business, value fluctuates significantly based on environment and circumstances. Companies must constantly monitor market changes and redefine their value propositions. The lessons from the example of water represent a universal principle applicable to any product or service.
By adopting the perspective that “value evolves,” businesses can greatly improve their chances of success.