In the Business Section of at least one of the Newspapers I read, the Orange County,Ca.,Register, a Journalist wrote that BROOKSTONE, the primary COMPETITOR of SHARPER IMAGE,is offering to redeem the GIFT CARDS,COUPONS,AND GIFT CERTIFICATES,pertaining to SHARPER IMAGE.
they are not allowed to accept the GIFT CARDS,ETC.
BROOKSTONE is even offering a 25% discount from the RETAIL PRICE OF THEIR MERCHANDISE to ENTICE the CUSTOMERS OF SHARPER IMAGE TO BECOME BROOKSTONE CUSTOMERS.
THATS WHAT I CALL GOING FOR THE THROAT.
KICKING SOMEONE WHEN THEY ARE DOWN.
To me, that explifies the REALBUSINESSWORLD.
But I have also learned, that if, "YOU LIVE BY THE SWORD, YOU DIE BY THE SWORD".
WHAT GOES AROUND, COMES AROUND.
Not having attended HARVARD,WHARTON,OR SLOAN, but instead having gone to the BusinessSchool of HARD KNOCKS, with a Major called THE STREET, I have witnessed a Business Strategy which is different than GOING FOR THE THROAT, that I don't agree with.
In the AUTOMOTIVE AFTERMARKET, during the 60's and 70's, a Company name MONROE SHOCK ABSORBER, decided to discontinue being an OEM SUPPLIER to the CAR COMPANIES and place all their efforts on creating a MARKET for their SHOCK ABSORBER products.
They created different levels of SHOCKS for different VEHICLE USES.
They introduced STANDARD SHOCKS (about OEM level) HEAVY DUTY SHOCKS, AND LOAD LEVELERS.
The performance of the different products was very easily demonstrated and obvious, primarily because of the thickness of the shafts and housing,etc, and when they were installed on any vehicle, which was almost as easy as changing an oil filter, there was a tremendous difference in the ride and control of the vehicles.
The marketing of the products was fantastic.
They created what were called MONROE BARRELS (they became one of the largest users of steel barrels in America) which were spray painted a bright Canary Yellow with the large MONROE name imprinted in very large letters.
The Cover of the barrel held 2 shock absorbers with levered rods and handles, which represented a WORN shock, and a NEW MONROE SHOCK.
Car Owners were asked to pull both handles to see the difference in the ACTION of the SHOCKS.
These barrels were placed either beside the entrance doors to the Gas Station or Garage, or between the entrance to the SERVICE BAYS.
These barrels could be and were, very visible from the street.
There were hundreds of thousands of these BARRELS sold throughout the United States and Canada, I'm not to sure about Mexico since there weren't many cars registered and driven, and most of the Owners couldn't affort new shocks, but the Navajo Indians in Gallup,New Mexico, were crazy about putting them on all their pick-up trucks, so that their Squaws would be more comfortable, as they rode outside of the Cab and in the bed of the Pick-Up Truck, which I thought was very thoughful of the Braves.
MONROE employed a tremendous Sales Force with tremendous Expense Accounts, and they did whatever that had to, to move merchandise.
And Merchandise they moved.
Every vehicle in America must have had the O.E. shocks replaced with MONROE.
Everyone was happy, and especially the DEALERS who made over 50% profit on the MONROE SHOCKS,and they weren't cheap.
Even GAS STATIONS carried complete inventories of MONROE SHOCKS valued at up to $10,000
MONROE which was a Public Company, enjoyed tremednous profits and it was reflected in the price of their STOCK.
THEN ALONG CAME GABRIEL.
GABRIEL SHOCK ABSORBERS had a very small share of the aftermarket Shock Absorberbusiness.
They were aware of the PROFITS that MONROE had, and they wanted more of the action.
In order to maintain their marketshare,and maintain their profit levels, to keep their STOCK at such record HIGHS, MONROE was basically locked in as far as having flexibility with their promotional and sales expenses.
If MONROE has to maintain a 60% gross profit in order to maintain the price of their stock, but as it turned out, GABRIEL didn't, then GABRIEL had a lot of profit that they could play with to penetrate the aftermarket and MONROE couldn't respond.
So GABRIEL proceeded to eat away at MONROE'S MARKET SHARE by bribing, in a sense, GAS STATION AND GARAGE DEALERS, PARTS STORE OWNERS, AND WAREHOUSE DISTRIBUTORS,by offering TRIPS,TV'S, AND EVERYTHING ELSE, to switch over to GABRIEL SHOCKS.
GARBRIEL ATTEMPTED TO STEAL A MARKET THAT MONROE HAD CREATED, AND THEY PUT MONROE ON THE DEFENSE, WHO REALLY COULDN'T HAD LIMITED RESPONSE CAPABILITY BECAUSE OF THEIR FINANCIAL LOCKED POSITION.
MONROE COULDN'T LET THEIR MARKET VALUE DECLINE BECAUSE OF LOWER PROFITS.
GABRIEL USED SUCH EXHORBITANT PROFITS THAT MONROE HAD TO MAINTAIN, TO STEAL THE BUSINESS FROM MONROE, WHO COULDN'T RESPOND.
But the Business Lesson is, that GABRIEL NEVER LOWERED THE PRICE OF THE SHOCK ABSORBERS AT ANY LEVEL OF DISTRIBUTION.
WHY RUIN A GOOD THING.
The GABRIEL STRATEGY was that after they secured a certain share of the Market, then they would discontinue the PARTY and enjoy the HIGH PROFIT MARGINS that MONROE had established.
IT WORKED.
Now switch to New Car and Truck Sales.
The Asian Car Manufacturers are enjoying record profits on the sale of their vehicles that Detroit can't because of the labor and benefit costs differentials.
TOYOTA AND NISSEN could provide every optional feature that they now charge extra for, as Standard Equipment, and use their high profit margins to pay for it since their labor and benefits costs are thousands less than Detroit.
If they did, they would destroy Detroit, but before they would happen, the US Government (Congress) would intercede.
Why would anybody by an American Vehicle and have to pay for Options that were Standard Equipment on Asian Vehicles?
The Asian Car Companies have chosen not to take the American Car Companies totally out of the business, at least in America, AND INSTEAD, MAKE TREMENDOUS PROFITS.
IN MY OPINION, THEY ARE MAKING A BASIC BUSINESS MISTAKE.
IN BUSINESS, AS IN BOXING, WHEN YOU HAVE YOUR OPPONENT ON THE ROPES, FINISH HIM OFF.
The Japanese are making the same mistake that they did at Pearl Harbor on December 7th, 1941.
Even though they succeeded in destroying our Fleet, and murdering Navy Sailors in the water and on the ships, with 2 separate and delayed bombing runs, what they did was WAKE THE SLEEPING GIANTand allow for rebuilding and retaliation.
AND THAT WE DID. WE WON THAT WAR AND WE WILL WIN THIS ONE.
The American Car Companies, by allowing all Competitors access to the Mature American Market, have provided the vehicle necessary for Detroit to reduce their LABOR AND BENEFIT EXPENSES, and HAVE TO OPEN THEIR DOMESTIC MARKETS TO DETROIT OR AT LEAST AMERICAN BRANDED VEHICLES.
They have also proven to Detroit that Americans will buy any product there is, including Cars and Trucks, regardless of where those products are made.
That means that Americans will buy American Branded Cadillacs,Lincolns,Buicks,Mercurys,Chevrolets,Fords, and every other Brand and Model, even when they are made in China,India,Pakistan,or Vietnam.
When that happens, WATCH OUT TOYOTA AND NISSEN.
NOBODY KNOWS CARS AND TRUCKS, AND EVERY ASPECT OF MANUFACTURING AND MARKETING,THAN DETROIT.
I predict DETROIT COMPANIES, will capture at least 50% of the WORLD MARKET, which is now at 73 Million Vehicles, and growing.
The American Market is Mature at between 15 and 17 Million Vehicles.
The Foreign Car Manufactures have let the Fox (American Car and Truck Manufacturers) into their domestic HENHOUSES.
The current Hearing Aid Manufacturers, ALL OF THEM, including the NEW COMPANIES, don't want to upset the Profit Margins existing in the sale of HearingAids, Worldwide.
They are now sourcing the products from Singapore and Vietnam. and of course China.
But yet the Retail and Wholesale Prices are increasing.
The Hearing Aid Manufacturers, and everyone else involved, are enjoying record profits.
Yet they are grinding their Vendors for better costs, and they still seek the lowest labor and material costs.
At some point, a New Company will appear on the scene, buy the same products from Singapore,Vietnam,and China, and make them available at retail for $200 or $300 instead of $2,000 or $3,000 each, and destroy the hearing aid market as we know it today.
What goes around, comes around.
Read the Business Section or the Wall Street Journal.
Where is Crown Books? Home Depot and Lowes,soon to follow. Where is Sears and K-Mart.
Real Smart, Business School Graduates.
They should have attended the Maxwell Street (12th Street) Business Graduate School.
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