Competing on Value by Mack Hanan, Peter Karp

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By Mack Hanan, Peter Karp

Provides a brand new method of promoting that emphasizes now not competing at the foundation of the simplest cost, however the maximum worth i.e. demonstrating to present and people searching for products/services that utilizing your service or product will both minimize their expenditures or increase their sales. allotted via Gale. Annotation

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All business managers strive to maximize the contributions of their most crucial revenue generators. This is their key to profits. If you can position yourself as a value-adder through revenue expansion, you have the best chance of becoming a customer's strategic ally because all businesses exist to make money. No business exists simply to reduce its costs. Yet cost reduction is often the only way a business, especially one that is mature, can free up funds for growth that can be used as the equivalent of new revenues.

This is true as a direct result of qualitative excellence across the board. 4 parts per million. As a result, quality will virtually disappear as a competitive advantage. It will no longer differentiate suppliers in any meaningful way. 9996? Why will a customer pay more for it-and if he does, how much more? " Unless a customer's "point of sufficient return" is known, where his satisfaction is optimized, the supermaximization of quality over and above that point will simply represent unnecessary and often unrecoverable cost.

But overtime accounted for Page 27 only 3 percent of all labor cost against an industry average of 6 percent. " Glances were traded, but no money. Money changes hands only when customers congratulate their suppliers. Page 28 2. Know Your Value When you compete on value, you must know each major customer's cost problems and revenue opportunities. Cost problems represent negative values. They need to be avoided, reduced, or eliminated altogether. Revenue opportunities represent positive values. They need to be taken advantage of faster, less expensively, more successfully, and at higher margins.

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