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Barriers to the upgrade cycle in a commodity process industry: evidence from the UK packaging industry

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Abstract

Attempting to move away from commodity-based products into higher value added ones remains one of the key challenges for research and development (R&D) managers. This paper focuses on developing an understanding of these challenges in the UK packaging industry. The research presents evidence from the case of a single firm, within this process industry, that produces commodity products. The paper contributes to Lager's product degradation–upgrade cycle, which illustrates how functional products degrade into commodities unless product functionalities are continually improved. We characterise the ‘upgrade’ aspect within this model. The paper presents the findings of a 3-year research project with one of the largest packaging manufacturers in Europe. Five barriers are uncovered that hinder firms attempting to increase the level of product differentiation in order to ‘upgrade’.

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