Author: Ning Yu, from the title figure: Vision China
Whether it’s an individual customer or a corporate customer, I often hear this saying: “Our products can save you money.”
As a consumer, of course, I hope to do the same thing, and the less money I spend, the better. But logically, it seems a bit wrong: If the business in a field is getting more and more money, isn’t the business getting smaller and smaller?
The so-called unsold quality of buying, behind the “more and more money-saving”, may breed a market space that thrives. Let’s take a look at these routines that make money bigger by saving money.
Catch the market of others by low price
This sounds like it’s easy. It’s not about seeing who is making more money in that field, aiming at each other’s profit margins, imitating the opponent’s products and robbing the market at a low price.
In fact, in today’s fierce market, there is not much market space that is easy to obtain. If you look at other people’s money, you may have done the ultimate in internal management, minimize your own costs, or have a good customer relationship and ecological environment to hold such a high profit margin.
All types of companies have their own advantages and disadvantages in terms of cost control. Large enterprises promote productization, so for replicable products, the cost can be reduced by economies of scale, and the marginal cost is low, which makes the competitors discouraged; while the small enterprises have the characteristics of small and fast, and the internal management costs are low. The response is fast and adaptable, which is beyond the reach of large companies.
So we will see that sometimes there are large enterprises in the market that use the scale advantage to fight small businesses. Through subsidies and price wars, small enterprises want to cry and tears, and hand over the site; sometimes they are small businesses. Taking advantage of low-cost advantages will allow big companies to make a dilemma. If they cut prices, they will lose money. If they do not cut prices, they will lose their orders.
In short, this model is to find a competitive advantage in terms of price and cost, and to grab business on the same track. Under this model, enterprises use their own growth to squeeze the market space and profit space of other companies, and the total market volume is declining. In other words, often business cannot last long.
Achieve overtaking with new technology
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