Negotiators have yet to finalize a Doha round global trade agreement, but one thing they have agreed on was to end all agricultural export subsidies by 2013. The talks began in 2001, and are not yet concluded, as everyone angles to get the best possible deal for themselves at the expense of everyone else.
SHORT TERM THINKING IS HOLDING US BACK
If we continue as is, like our car-making brothers, that sound we are hearing as we scratch our head is the sound of our overseas competitors leaving us in the dust, in our own country. Now is our chance. A storm is gathering. How can you survive and thrive?
One thing is for sure, subsidies are no longer be an excuse to hide behind.
To tap into the opportunities hidden within this gathering storm, to survive and thrive, we need to wake up fast, or risk discovering soon enough that much of our most profitable retail space, as well as much of our manufacturing base, is owned by others. Like a young man who realizes that he, and not his date, is the real blind date, we need the humility to admit that our choices have led us to where we are, not subsidies. People don't buy Japanese Cars and French Cheese because of subsidies, they buy because they are damn good.
They do buy crappy goods only on price, that's for sure, and in fairness, items that are good enough but so much cheaper it isn't worth the extra expense. If you are in either of those businesses, and you don't understand how to streamline, to tune your engine so you can compete, you are in trouble. That is why I like value-added. Quality gives a little breathing room.
Big commodity markets are wonderful to be part of when entering virgin territory. Sales volumes shoot up, dollar profits are fat, people are happy with low prices. Things change when the market is saturated and competition fierce.
- If the only way you have to grow is through advertising
- And the only advertising that works is discounted deeply
- If aren't growing by word of mouth
- If the people who buy from you aren't coming back again and again
- Your business is either dying, or killing you slowly
I am not against commodity production. Industrial production has been an incredible blessing, improving the material of life for great numbers of people on a mass scale.
But, there is a hole in commodity logic that needs to be closed before betting the farm on it. It thrives on economy of scale. The bigger you get, the lower margin you can live with. But no matter how big you build, someone always builds bigger. Everyone ends up fighting over a thinner and thinner slice of the pie. As costs go up a razor thin margin evaporates. At some point, the little guy you put out of business by growing big is you.
Better to choose adding value. Better to choose Quality. Better to find you hidden losses and exploit your hidden opportunities, before you turn to raising your prices without adding more value. Better to Survive and Thrive. Customers are people, and people should not have to pay for our mistakes.
Are you trapped by short-term thinking?