Competing on Price

OptiWiz said: "What can go wrong? I can think of a few things that can go wrong. In particular is oil prices can rise, making transportation cost more for all goods. If your product is completely price dependent, like most commodities, what can you do to offset this price increase in materials?"

chahinemm said: "profit margins decrease.. reduce growth potentials... challenges the management skills to really fully exploit the available resources and available expertise in the company. chahine"

OptiWiz said: "Worse yet, the same oil price increase puts even less money in the hands of the purchasers of your product so you get squeezed on both ends. You have lower demand for a price that you can't raise the price on, and yet your cost structure goes up. Companies have been facing this very issue in the last few years."

chahinemm said: "i agree so what solution to that... improve quality and charge premium...!!! or decrease quality and charge less!!! chahine"

TheInsider said: "I think in area of Auto you will see just that.. less quality and cheaper prices."

Heather said: "A company I used to work for (manufacturing plant) made us pick up and sort parts that fell on the floor to help reduce costs. They still offer lower end models, but have added much nicer (and more expensive) models to their product offerings."

BarbBQ said: "gm seems to be cutting their own throats to give away cars. i would think that even if they sold an extra million cars, if they discount them all their profit won't be as much. they laid off a bunch of workers, too so that can't be good. doubling sales to decrease profits seems like a bad move to me."