Stay off price wars.
There are three ways to win competition
2. Niche Focus
Low Pricing Strategy is not the only way to win competition, concentrate on building a brand so you can try Niche Focused Strategy or Differentiation Strategy by standing your proposition as a brand out enough to justify good reasons why your clients should buy from you, even it’s not as cheap as the rest. It’s the Apple model.
Don’t sell functional benefits, sell Experience, Quality, Depth and Brand!.
In my years of studying innovation, I have come to the summary that what kills the growth of companies is that they move strategic business decision making to the accounting department, always trying to cut cost as against increasing revenue.
You mustn’t always buy from the source, to make more profit, you mustn’t always short change the supply chain by cutting off the middle man so you can save cost, how about being a platform, for all the supply chains and value chain?.
That’s what Uber, Netflix, Instagram, and Google are doing. Be a platform. In the long run, you’d make more profit through dependency. Sadly, strategic decisions are now dependent on P&L Statements, ROI with higher IRR and NPVs (returns on Investments with higher Internal Rate of Returns and Net Present Values) and shorter pay back period, as against how truly the user’s lives can be made easier, more exciting and better with their products, till a new company comes from the bottom and provides more for more price.
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