Collusion is Great?

I often hear business people gushing about their competition; “Frank is a great guy. I stay away from his clients and he stands clear of mine.” Or, “John won’t undercut our pricing, he doesn’t want to drive the market down. What a great guy. We are on the same page”. Even more perplexing, often at job walks I will overhear competitors comparing pricing; “What was yourprice at East 4^th? We went in at 35 points”.

Funny that the guys doing all the talking or colluding are usually the guys on the loosing end.

The goal of business is simple: deliver a superior product or service at a better price than your competition. That’s right: if you want market share, you need to beat your competitors.

I fail to see how sharing intelligence gives you the upper hand. It takes years to build a brand and establish a true competitive advantage. In realty, the only advantage most entrepreneurs have over the next guy is the grey matter between their ears.

If you can deliver at a better price than the next guy, congratulations, you have won. Keep your secrets to yourself!

Business is a game of “high stakes” poker. In poker and business you need to out-smart and out-work the other guy in order to win. Discussing strategy with other players or competitors is loose and risky. You may be thinking that you can lead you competitors astray with a bluff; Sorry, eventually your bluff will be called.

When you sit down to the table keep you mouth shut and hold your cards high, or you will be knocked out of the game.

Live and Learn

It seems that the recession is ending. Let’s hope? Consumer and business confidence is up, retail sales are solid, houses are selling and stimulus programs are in full flight. I question how the economy has turned around so quickly but, there is some light at the end of the tunnel.

The 1st quarter of 2009 was a dark time at Wolfgang HQ. Very bleak! But, as the year unfolded and we executed our recession strategy our prospects brightened. In fact, by year end, we had completed our best revenue and earnings year to date. So, what did we do right?

· We made the tough and painful decisions quickly
· We set clear expectations with our key staff to expect a bumpy road ahead
· We changed our business model from employee based to contract based
· We managed overhead tightly
· We increased our marketing effort four fold
· We watched cash flow like hawks
· We took great care to provide excellent service to our clients
· We lowered our prices
· Our staff came through big time with loyalty and performance

All the above were great “recessionary” moves that buoyed Wolfgang in 2009. Can’t help but think “Should have made those moves when the economy was booming!” Live and Learn.