Food Chain

Moving Down-Moving Up

food-chainSeveral months ago, I came upon a $5 Million dollar business. It was in a highly competitive industry. I asked a few questions. What made these guys different from their competitors? While they had some of the best equipment in the industry….their competitors had or could get the same. They tried to have excellent customer service….so did some of their competitors.

Finally I said: “How do you gain new business?” The answer was revealing:

“We lower our prices 30% to undercut our competitors!”

Since their products can easily be made by others….the only way to gain business was by price cuts.

I wonder how long that can last….especially in these times. Moving down the food chain (cutting prices) can’t last forever.

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