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Low Price Competition Reduces Overall Industry Profits

2012/2/3 11:26:00 16

Market

Like battlefields, competition is everywhere.

"Business"

compete

The slogan, which should be built on the basis of "healthy, healthy and consistent with the market rules", has been shouting for many years. But a holiday, a business opportunity can lead to price war. The idea of low price strategy is harmful to people's profit. This is a common saying and is no longer tautology. Here, I want to say that every enterprise has the responsibility to promote the development of the industry, and malicious low price competition is the biggest obstacle to the development of the industry.

The essence of business is to make money, so the product must ensure a certain profit.

Profit is the lifeblood of an enterprise. What is the profit of an enterprise? What is the profit? What is the development of employees? Or profits! The development of the industry is the same, without profit and without development. The reduction of product prices will inevitably depend on the reduction of cost or profit.

If enterprises can reduce costs and reduce prices through technological innovation or improving management efficiency, that is absolute progress and guidance for the development of the industry.

However, if we reduce the profit to maintain a low price, it will slow down or even stagnate the development of the industry.

Some people say,

low price

It is a temporary strategy to seize the market first, and to have the pricing power after having market position, and how much to sell at that time.

As everyone knows, when enterprises sell at a low price, they have already set the price for the products of the whole industry and put on chains.

Consumers will examine the same products in the industry according to this standard.

If the product is not an absolute monopoly, if the product is not an investment product, then once the price is lowered, it will be very difficult to go back.

Public opinion divides people into three categories: ordinary youth, young artists, and two young people.

In my view, enterprises can also be classified according to this.

Ordinary enterprises earn normal profits and develop smoothly on the basis of the market; the literary and art enterprises earn excess profits, leading the industry to attract worldwide attention; two, the enterprise cost and price operation, lower the price of the whole product line, disrupt the market and harm others and harm themselves.

According to this classification, the Apple Corp of the United States can be regarded as a youth of literature and art. It has swept the world overnight through its extraordinary creativity, change, uniqueness, ease of use, product quality and marketing strategy.

The speed of the renewal of the enterprise's products is fast, and it makes people speechless. Moreover, its products have been uniformly priced and never depreciate arbitrarily. Instead, they choose to reduce prices in a planned way before the advent of the new generation of products, and firmly control the pricing power of products.

The latest report shows that the company's profit in the first quarter is more than 13 billion dollars.

Market competition is fierce, discount sales promotion is inevitable, but enterprises should have a bottom line, that is, to ensure the overall profit of the industry.