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> By raising prices and lowering quality, a stagnant business can rely on its most loyal customers to continue to buy the product, allowing it to squeeze and sq
by Lionsion 8y ago
> By raising prices and lowering quality, a stagnant business can rely on its most loyal customers to continue to buy the product, allowing it to squeeze and squeeze and squeeze its customers as they croak. This slow liquidation of an asset’s value, destroying even its reputation in the process, kills the product. Wherever newspapers can be found reducing page size, cutting news pages, narrowing coverage area, reducing staff, shrinking circulation area, postponing the purchase of new equipment and raising subscription prices, they are harvesting market position.
Attention anyone sill subscribed to the St. Paul Pioneer Press, the San Jose Mercury News and the Orange County Register: it's time to quit.
If those papers have any local competitors left, they should get the money instead.
- ProAm 8y ago> By raising prices and lowering quality, a stagnant business can rely on its most loyal customers to continue to buy the product, allowing it to squeeze and squeeze and squeeze its customers as they croak. This slow liquidation of an asset’s value, destroying even its reputation in the process, kills the product I can't help but feel a tiny analogy to Apple with this statement.
- georgeecollins 8y agoIt is also an analogy for Apple in 1995. Companies harvest their market position sometimes, and then innovate at other times.
- jessaustin 8y agoI think this is a standard technique for fast-food businesses, although I've never heard it mentioned. Run some flashy ad campaign for low-priced good food for a few months. Leave the low prices in place for about a year. Then slowly, slowly ratchet up your prices. After 8-10 years of this, your only remaining customers have very little price sensitivity, but at some point along the way you soaked every single customer as hard as you could. If you need to raise revenue now that you've chased away lots of customers, start over from the beginning. I guess someone at Arby's didn't get the "start over" memo...
- deleted 8y ago[deleted]
- JPKab 8y agoActually, this makes me think of the giant software corporation CA. Larry Ellison of Oracle referred to CA as "where software goes to die" because of this business practice. When Oracle says that, you know it's bad. Every time I'm at some company where an entrenched piece of software that has a declining user base (Erwin data modeling software, Rally for Agile, etc) I discover that CA has bought it, put it on life support, and let it just slowly rot.