Home    Subscribe    Contact    Login

Business Mistakes 1: Racing for the Bottom

by Roy Chambers (follow)
Business Basics (34)      Business Management (16)     
One way to be more competitive in business is to simply find an existing product or service and offer it at a lower price. This can be a very successful way to do business. However you have to be careful not to end up in a race to the bottom.

Attribution: Flickr - Steve Jurvetson


You can undercut other people's prices by being more efficient or using economies of scale more effectively. Or you could just reduce the quality of the product, reduce services around your product, pay your staff less or try to bully them into doing more work.

When many people in an industry are doing this it can result in a self-destructive race to the bottom where there is little profit and even less customer satisfaction.

You can only go so far until you hit the bottom and everyone fails.

Attribution: Flickr - Steve Jurvetson


Great businesses find cost savings in other ways. Toyota put so much emphasis on quality that they were able to make better cars more cheaply. Henry Ford famously pushed for greater and greater efficiency while paying his workers far more than anyone else.

So avoid the race to the bottom by finding real ways to make your product both cheaper and better. When you really understand your customer's needs and desires you are often able to charge more that your competitors.

#Business Management
#Business Basics
I like this Article - 5
[ print friendly ]
More Articles by Roy Chambers
Previously I have argued, that for most people,
7 likes
I want to compare two countries in general terms
6 likes
There are lots of reasons to start a business
5 likes
Thanks to our memories of a very popular TV show most of know what a MASH unit does
5 likes
In a world where even the smallest customer service breach could end up on a review website and dama...
1 like
I see it all the time
5 likes
view all articles by Roy Chambers
Articles by Roy Chambers on Other Hubs
ID: 19128
[ Submit a Comment ]
Trending Articles
Resumes are the most efficient way to share your professional experience with another person
1 like
When starting a business, it is hard to gain exposure, which is essential to make money
5 likes
Many people who have worked for larger corporations revel in the idea of starting a small business
5 likes
So, you want to run your own business but you fear giving up that “perfect” job that keeps the bills...
6 likes
There is a new “buzz” in the air – having a business that costs next to nothing to set up, working m...
2 likes
Rina Chia is the %%'Business Boss'%% behind Take 2 Markets, an innovative concept giving ladies the ...
7 likes
Whether your business website sells a product or service or is simply an online space which explains...
7 likes
Many people dream of being their own boss, having the flexibility to work whenever and wherever they...
1 like
Unless you have been hiding under a rock, you have no doubt heard people talk about "Social Media"
7 likes
Kate Iselin, a female entrepreneur with a flair for fashion, design, feminism and current affairs, s...
7 likes
Categories
Featured on Other Hubs
 
Copyright 2012,2013,2014,2015,2016 On Topic Media PTY LTD. ABN 18113479226. mobile version