Demand for Quality

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I was reading over the weekend about the BlackBerry 10 OS launch for the end of Jan. 2013.  At first a surprising date, they miss the Christmas retail rush for new hand-sets and tablets but then I read deeper and was really impressed by the fully thought through strategic value proposition they are going to be making.

Remarkable!

In fact I’m waiting for the BB ‘L’ series launch.  I’ve always been a Nokia man, I have an N8.  Great camera but the phone itself is passe, an also ran.  Having recently purchased a PlayBook I was wowed by this piece of technology for £129.00 inc. vat each.

Remarkable!

So I’m looking forward to the BlackBerry London and will switch, I assure you.

BlackBerry have made it clear they are not going to compete at the low-end of the market, it’s not what they do.  This could be a death knell but I don’t think so, in fact I’m going to be buying some stocks and just watch them go!  This is a clear statement of intent, a vision, a mission, A STRATEGY NO LESS!

Now… looking at bakery trends in Switzerland (a great leap this one I know, but we supply the bakery industry with industrial/commercial bakeware and refurbishment services), the Swiss demand quality for food stuffs.  However, price is increasingly becoming the differentiator for rival retailers, German discounters Aldi and Lidl now have a firm presence in Switzerland.

The differences in price from budget to premium can no longer be supported, the premium product with the higher prices is not being purchased, the gap in quality is not sufficient to support the higher price.  In fact COOP have been undercutting the discounters in a bid to shed any image as a high-price retailer.  They are boosting efficiency through centralised production and distribution, automation and job losses as a result.  But importantly they are not reducing the quality to the lowest level possible, it’s a mid-market offering at a lower than discount price!

Aryzat (the worlds largest baker) are also restructuring along the same lines; centralised production and distribution, automation and job losses.

We are plainly in an age (but it wont last for ever) where quality is demanded, expected but the battleground is price when it comes to sales or are we?  The BlackBerry strategy may just demonstrate that it’s still to do with who you are, what you are selling and who to.  In short where markets are mature, fragmented and commoditized you are gonna have to compete on price, NO OTHER OPTIONS APPLY!  If on the other hand you have a product which retains its uniqueness, its special appeal you could go the niche route.

You get to choose.  Make the right choise and future secure for now (yes you are gonna have to keep doing this you know), make the wrong choise and its all over, right now, no going back, no re-runs, that’s it.

If you are going to head down the low price route a word of warning….

Think of your business as if it were a bridge; customer requirements on the one side and delivery of the product and/or service on the other.  You lower operating cost’s to point where you have removed all of the structural redundancy of the bridge, in other words you stop investing in your business, cut cost’s.  You begin the process of delivery, if what you are aiming to deliver is within the remaining, existing capability and never any more you are gonna be okay.  If on the other hand you try to overstretch your business, over-load the bridge, it will collapse.  I absolutely promise you this!

Low price will often mean a lot of re-organisation and investment before you go on the low price journey, so be prepared, be ready because its gonna be painful.

Sometimes it could just be better to do what you do, do it really well and sell it at a price that is justifiable.

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