Though it seems less of a problem of prices and more a problem of costs.
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Fun to re-read Porter in the wake of recent IPOs. “As Porter notes wryly...most companies could instantly achieve rapid growth simply by cutting their prices in half.” (‘Understanding Michael Porter’)pic.twitter.com/57ZQp3gyMG
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Any reason you’re reading this not Competitive Strategy?
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I heard this was the best Porter book, but that could be wrong.
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Also Buffett’s quote regarding the insurance business: you can achieve any volume you want if you’re willing to sacrifice on price. Doesn’t mean that you should.
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Could you? You’d have to double unit sales just to stay even
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Just thinking: when is the inverse ever true?
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If the cut is by 50%, sure. But, in general, I don't think most businesses can achieve rapid growth by cutting prices. The brokers just cut prices by infinity and are unlikely to see a blip.
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Porter was too steeped in microeconomics. It’s much easier to grow revenue by raising prices, mainly because that lowers management overhead.
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