1000 Business Lessons Every Businessman Must Know

Chapter 38 Business Blind Spots: Business Mistakes Commonly Made by Some Bosses (2)
Most American companies, and especially all European companies, set their prices by adding up all costs and then adding profit margins.Then, when they come out with a product, they have to start cutting prices, do expensive redesigns, have to take losses—and often have to let go of a great product because it wasn't priced right .Their argument is "we have to recover costs and generate profits".That's true, but it's an irrelevant issue, and customers don't think it's their business to ensure the manufacturer's profits.The only reliable way to set prices should be to start with what the market is willing to pay (and therefore have to assume what prices competitors will set) and design for that price.

Cost-push pricing shows why the US consumer electronics industry no longer exists.The US used to have the technology and the product, but it operated on cost-push pricing - whereas the Japanese practiced price-push costing.Cost-guided pricing also almost destroyed the machine tool industry in the United States, making the Japanese, who adopted price-guided costing, a leading position in the world market.The recovery of American industry in recent years is still very limited, which is the result of the U.S. industry finally switching to price-guided cost accounting.

297. Old achievements hinder new ventures
Operators tend to cling to the fruits of past success and are unwilling to break through old achievements to achieve higher innovation.It was this that derailed IBM.Its fall was paradoxically caused by its unique success: when Apple was first to introduce the personal computer in the 70s, IBM caught up almost overnight.Yet while it took the lead in this new PC market, it tied this new, growing business to the old cash cow, the mainframe computer.

In fact, this is the second time the company has made such a mistake. When the company first invented the computer 40 years ago, senior management insisted on not offering its computers where it might sell punched data cards, which were its cash cow at the time.Later, it was the Justice Department that saved the company when it filed an antitrust lawsuit against the company for monopolizing the punched data card market, which forced management to abandon the punched data cards—thus saving the fledgling computer.The second time around, though, it didn't have the kind of luck to save it.

298. Indulging in old problems and missing new opportunities
All you get from "fixing the problem" is undoing the damage.Only opportunity provides results and growth.Opportunities are virtually every aspect as difficult and demanding as problems.The right thing to do is to first list the opportunities for running the business and make sure each one is adequately staffed (and supported) before you should list the problems and staff them.

Sears has probably done the exact opposite in its retail business in recent years -- letting the opportunities go and focusing on solving the problems.And the big European companies (such as Germany's Siemens), which are steadily losing world markets, presumably do the same.And GE did exactly that, with a policy of getting rid of all businesses, even if they were profitable, that did not offer long-term growth and opportunity to place the company among the best in the world.GE then puts its best people on the path to opportunity, constantly bringing forth new ideas.

As a result, managers wallow in problem-solving and miss new opportunities.

299. Mistake in positioning the entire company

Mazda Corporation, as the fifth largest automobile manufacturer in the automobile kingdom of Japan, was founded in 1920 and is still in the leading position in the development of automobile engines, especially the high-end racing cars it produces, which owns half of the Japanese market.It is such a large-scale company with such a solid foundation and great reputation, which today belongs to the Ford Motor Company of the United States.Mazda was acquired by overseas competitors, which is an unacceptable fact for the Japanese, which has always been known for creating economic miracles.

At the end of the 20s, Japan's bubble economy was becoming more and more serious, but Mazda was still self-admired. It only cared about catching up with Honda and Nissan in technology, insisted on developing and producing a large number of high-end cars, and even invested 80 billion yen for this purpose. A new factory was built.However, due to the backlog of products, the operating rate of the new production line is less than 1200%, which is a serious consequence of the company's inaccurate positioning.

Mazda is leading the world in technology and has created a first-class brand in its own technical field, but its decision makers only focus on technology and the company's self-centeredness, while ignoring the company's product market share and consumer market expectations. The perception and recognition of its products led to the wrong positioning of the entire company, so it could not escape the inevitable consequences of being merged by the American Ford Company.

Because its market share and the company's original market share have been gradually squeezed out and divided due to the company's wrong positioning, and it has been unable to continue to survive and develop.

300. Undecided, delaying the fighter

As a manager, you must dare to make decisions, be good at making decisions, and make quick decisions after seeing the right time.We must never be indecisive and miss the opportunity.

Any decision always has certain time and space conditions, and there are few decisions where all conditions are clear and the results are clear at a glance.When making a decision, it is necessary to recognize the internal and external conditions, but it is impossible to wait until these conditions are fully grasped before making a decision. Instead, it is necessary to strike a balance between the condition control and the timeliness, and make the best possible decision on the basis of grasping the conditions as much as possible. realistic decisions.Therefore, the correct decision is the choice of the best solution based on the actual conditions, that is to say, the choice to balance between ideal and reality.

British management guru Richards Rubin said: "In the process of pursuing perfect decision-making, reasonable decisions will be lost. The most perfect decision-making can only be a distant dream, and the most reasonable decision-making is a decision that meets actual needs. .”

Quick decision-making can not only seize the best opportunity, but also break through traditional negative concepts, greatly mobilize the enthusiasm of subordinates, and strengthen the determination of subordinates to implement the plan and strive for victory.On the contrary, if the decision-maker is ambiguous and indecisive at critical moments, it will distract the emotions of subordinates and disintegrate the morale of the team.

"Dare to make a decision" and "good decision" come from the courage and discernment of the decision-maker. Courage and self-confidence are always the characteristics and essential qualities of an excellent boss.Too much forethought, worrying about gains and losses, or over-seeking perfection and blame, trying to be safe in everything, should not be the style of a boss.

301. Nothing is outstanding
A person must have a certain kind of excellent ability before he can gain a foothold in society without worry.To be an enterprise, you must also have such a unique ability.If you have a unique product, naturally there will be no major worries.But the point is that it is very difficult for companies now to have such a unique hidden weapon.If there is, it is to have a brilliant strategy different from ordinary people in business decision-making.

On the battlefield, facing a powerful enemy, what kind of strategy and tactics can we adopt to win?In this regard, Mao Zedong made a brilliant exposition. He put forward the 16-character policy of "when the enemy advances, we retreat; when the enemy is stationed, we harass; when the enemy is tired, we attack; when the enemy retreats, we pursue".Mao Zedong used these 16 policies or 16-character formulas perfectly to lead the Red Army to gain a firm foothold in Jinggangshan.

Later, someone changed Mao Zedong's 16-character tactic to "If you don't have it, you have it, if you have it, you will be new, if you are new, you will be cheap, and if you are cheap, I will turn it around." One of the highest guiding principles.

To sum it up, the essence of the so-called "New Sixteen-Character Jue" is: I must have one thing that is superior to others.

In today's world, the transportation and communication have been very developed, the world has actually merged into one body, and monopoly operation is actually no longer feasible.It can be said that what you have, he may have; what you can, he may also be able to.In such a unified situation, how can small and medium-sized enterprises break through the fierce market competition and grow rapidly?There is only one thing to rely on - you must be different from others in some way, superior to others, and stronger than others.

302. Doing Wrong Things in the Wrong Way

Everything has its rules and its objective laws.Therefore, no matter what you do, it is very important to pay attention to the correct method.

As a boss, you will inevitably have your own ideas and goals.But no matter how good an idea you have, you must find the right way to realize it.It is not enough just to have a beautiful vision, you must also be aware of the reality you are in, whether the reality has the conditions to make your beautiful vision a reality, and the conditions to realize your beautiful vision It is clear to the chest.Only when everything is in place and the method of realization is chosen correctly can we do the right thing and be successful.Otherwise, no matter how good a vision you have, no matter how motivated you are, it may be just a waste of time.

Bosses are faced with many decisions every day, and among all the decisions, the most important one is the entrepreneurial decision.Entrepreneurial decision-making is the first step and the core link of business operation, and it is also the starting point of business establishment and development.To be a boss, the first thing you face is the decision to start a business.The quality of entrepreneurial decision-making directly affects the success or failure of an enterprise.The main problems faced by the so-called entrepreneurial decision-making are: which industry to enter, what to do, and how to do it, that is, the problems of "what to do" and "how to do it".In fact, it's the biggest problem bosses face every day.If these two issues are decided well, the operation of the enterprise will be half successful.

(End of this chapter)