You Must Provide Value To Compete

Lesson number: 

All businesses are very competitive. That's what stimulates the economies of the United States and the world. Prior to the founding of the U.S., business was done a bit differently. In 18th Century Europe, businessmen would petition the King for the "exclusive" privilege of supplying a particular product or service. In other words, business was done through the grant of monopoly privileges. By LAW, this one man, or one company, would be the sole supplier of a particular product or service. This is the nature of monopoly, a special grant from the State that forbids competition.

So, contrary to popular thinking, Microsoft is not, nor ever was, a monopoly. And neither was Standard Oil. Anyone could have competed with these two companies. Competition and monopoly are mutually exclusive. They both cannot exist at the same time. It must be one or the other.

So what genuine monopolies exist today? Two big ones are the U.S. Postal Service and the Federal Reserve. One has the exclusive privilege to deliver your mail, while the other has the exclusive privilege to manufacture dollars. Competition, in both cases, has been removed from the marketplace. By LAW, you must use the Postal Service, and by law, you must use dollars.

On November 13th, 2008 the Postal Service reported a 2.8 billion loss for fiscal year ending September 30, 2008. No surprise. They lose money every year. They are not worried about competition. They have the ability to raise prices instead of operating more efficiently. It's a great place to work with great benefits. But we all pay a huge premium to FedEx and UPS in order to get next day guaranteed service.

And need we mention the crisis after crisis the Federal Reserve creates and then tries to fix by printing and spending more money? And their track record is a dandy! Since the creation of the Federal Reserve, the dollar has lost over 95% of its value!

Excluding privileged organizations and corporations, the vast majority of us MUST play by the rules of the marketplace. YOU can't rest on your laurels. YOU can't lose money year after year. YOU have to be sensitive to the constantly changing desires of your customers. YOU have to create and deliver VALUE in your products and services. There are two facts that have not changed since the start of commerce. Repeat customers always buy products and services from businesses that they LIKE and TRUST. They also want the most VALUE for their money.

Over the last three decades, the not as big as they were three automakers didn't match the value presented by the Asian, German and other foreign auto makers. Everyone I know, including my entire family drive foreign cars. We all love America. We all used to drive American cars until the Big Three couldn't compete with VALUE. They messed up and now they want the taxpayers that they failed to satisfy in the marketplace to bail them out.

Ford and GM claim they are doing great in China and other foreign countries. I watched a special on CNBC where Chinese prefer Chevy's over Toyota. They speak of Chevy's reputation for quality. Isn't that interesting? GM has a hot electric car called the VOLT that's supposed to be available in 2010. They've had this technology available for years. But they put it on the back burner and made Escalade's instead of Volts while Toyota was eating their lunch with the Prius. Unfortunately the way things are going, GM may not be around in 2010 to deliver the Volt. They messed up!

Ford's making a 2009 Fiesta that runs on Clean Diesel and gets 65 miles per gallon. They will only be selling this car overseas. It's a hot car at the right price. Instead of giving them taxpayer's money, why not HELP them sell this car in the U.S., so that they can get American consumers back. I would be the first to buy one. Clean diesel cars are hot in Europe. Clean Diesel is cleaner than gasoline and 30% more efficient. Ford could get back in the black quick by selling these cars in the U.S. The stumbling blocks: It costs too much to make these cars here with union wages and congress overtaxes the old diesel and is probably lobbied heavily by oil companies to keep out clean diesel. Self interest wins again!

As hard as it to swallow, it is in everyone's interest that competition thrives. Competition, while tough, brings out the best in the competitors. And consumer's (of which we all are) should demand and expect better products and VALUE for our money. Unfortunately, self-interest can throw a wrench in the whole process. Instead of competing by delivering VALUE, companies spend their money lobbying for laws and money to give them the ability of an upper hand.

Before you know it, that kind of thinking affects every industry and the ship sinks with EVERYONE in it. Choose the high road and become more VALUABLE. Compete in the marketplace or close your doors and do something else.