[creampuff]

The global economic crisis is starting to bite...

Nikon lays off 1500 workers at its Thailand factory due to reduced orders worldwide
Nikon axes 1,500 in Thailand

Circuit City owes Nikon and Olympus about US$15 million each...
Bloomberg.com: U.S.

Canon USA's rebate processing company goes bankrupt
Rob Galbraith DPI: Canon USA updates rebate reimbursement status

[Gooshin]

personaly i am not surprised that value chains like circuit city are having a hard time

they are dealing in non essential goods at prices that require volume to sustain profits.

such a business model cannot sustain economic downturns, it assumes everyone will always buy, and always buy more than the previous year!

its a shame to which levels the so called "capitalism" has driven the world into, everyone always wants lower prices, dont people realize that there is a floor, a bare minimum in cost of an item needed to pay for itself?

the people have no one else to blame but themselves

[navcom]

its a shame to which levels the so called "capitalism" has driven the world into, everyone always wants lower prices, dont people realize that there is a floor, a bare minimum in cost of an item needed to pay for itself?

the people have no one else to blame but themselves

Yep! That's the beauty of capitalism. You are free to trade and deal. But you live or die on your business decisions. It's all up to you. That's part of being free. If you want to play the "go to the floor" game on price and rely on volume to try to get the competitive advantage, you are free to do that. When the volume is not there, you can fail. So be it. It's called a correction and they've been happening forever and they will happen again. That's the beauty of it. Contrary to popular media belief, corrections are a good thing and are part of the capitalist system. Those who think it's a sign that capitalism is "bad" are those who think there is a system that has zero risk or those who think we should reward bad behavior. That's why so many people in the US are so upset with this whole bailout mess. It's a bad thing! Let it correct! We will feel some pain now but it will correct sooner and the world will return to economic growth. Start throwing government bandaids at the inevitable, and we prolong or deepen the crisis just like we did during the '30's where we needed a world war to get out of it.

Those who've made silly business decisions, spent in the wrong areas, and have debt to their posterior magnus, will fail. So be it. If we reward them with bailouts and handouts, they become a burden on the system, and worse yet, they continue with the behavior that got them there to begin with. On the flip side, many people will use the downturn to make proper business decisions, invest in their business future, buy product or infrastructure cheaper, and will succed beyond their wildest dreams when it turns around, if not sooner.

There is no economic system that guarantees success, man. The only question is how free are you to honestly learn from your mistakes and try again.

[Gooshin]

There is no economic system that guarantees success, man. The only question is how free are you to honestly learn from your mistakes and try again.

i am a firm believe in partial government intervention at nearly all levels of business (atleast in the form of taxes and levies)

i'm also a believer (wishful thinking really) that quality should be the primary commodity which is used to attract customers.

the bottom line is ofcourse, cost

but value comes from quality

however our society doesnt see it that way, they buy on cost ignoring quality more often than paying more for quality products (which may not necessarily even be all that good)

so what happens to the guys that truly make quality prodcuts but simply cannot charge less for them? they go out and if they are lucky stay in the shadows feeding a niche market

and the company that succeded in muscling them out? well, they will collapse too the moment demand drops, because their inhumanly low margins cant sustain their operations.

its a business cycle! i'm not denying that, but the people that get hurt in the end are you and me (well, maybe not you, or me) but those that depand on these low cost goods, and those that are employeed by these companies are getting a kick in the pants.


GM is a perfect example, instead of working on increasing the quality of their crap, they just advertise their crap at low prices, then more and more people realize that they sell crap, and no longer want to buy it, all GM had to do was start building quality cars to rebuild consumer faith, but no, now look at it.

The cut-throat low-price battles that the US has brought about is akin to two sides fighting for control of a bridge, where one side decides to blow it to smithereens, one side may have lost the battle, but now the bridge is gone and everyone is scratching their heads as to what now?

[navcom]

i am a firm believe in partial government intervention at nearly all levels of business (atleast in the form of taxes and levies)

i'm also a believer (wishful thinking really) that quality should be the primary commodity which is used to attract customers.

the bottom line is ofcourse, cost

but value comes from quality

however our society doesnt see it that way, they buy on cost ignoring quality more often than paying more for quality products (which may not necessarily even be all that good)

I agree with you...focus on quality, less government intervention. You are partially right on people ignoring quality and buying purely on price, but only to a point.

Your example of GM is a case-in-point. GM doesn't make the crud they did 30 years ago, but they still are a little behind the Japanese and many Euro makers...thus the reason they are in trouble and Toyota is not. When it comes to cars, people do focus on quality. Many would rather spend 15% more on a Toyota than a cheaper GM, which is why Toyota is overtaking them.

Now the consumer electronics market is different. The low-end products are price-focused, and probably always will because for those with a little disposable income, it's fairly easy to replace them if they break and they are cheap to start wtih. But companies that manufacture and retail cheap products exclusively come and go like the wind. This is part of the correction I talked about in my last post.

Corrections happen at both extremes eventually (over-priced and under-priced markets).

The bigger companies who extend into the cheaper markets have their mid and high end products as well, so the cheap market is just bait to get them into the brand. They can take a loss if they have to on the cheap products. It's really nothing more than an advertising budget to them.

Thus, the small and motivated business person focuses on the mid-range product...the value product.

There will always be a market for cheap crap. Some, like Walmart, even make a living doing it. But even though it appears the market will always be cornered by the cheap price, it's not really true. People like a good price, but when the rubber meets the road, what they really want is good value...a happy medium between a good price and good quality. For every Walmart, there are tons of slightly more expensive stores still doing a good business.

The fellow business associates I hang around with that are successful are that way not because they competed against Walmart or others of the same ilk. They are successful because they went after the markets that Walmart doesn't cater to....quality and great customer service.

I see this every day in my business. I do not make the cheapest products in my industry. I also don't make the most expensive. Both ends of the spectrum are dangerous. Too expensive and people expect way too much (and should) and you limit your customer-base. Too cheap and you are branded cheap...not long for the world because you aren't making any money and you have very few return customers, which is what builds a successful business.

Walmart is successful, but what about those that supply them with their products? Many of the brands you see today will be gone tomorrow because they couldn't make an income successfully. Some have learned to adapt, but it's still precarious. Walmart is just the retailer.

We give the customer a good quality product for a good price and we are profitable doing it...not obscenely so but very good...and sustainable even during a down turn in the economy. Our direct competition on the low and high ends are hurting very much right now.

...and the market will correct if allowed to.

[Gooshin]

...and the market will correct if allowed to.

the market will correct, but at a heavy price?

if (big if) there was a governing body in power that had the capabilities of properly controlling the market, would this not be the better scenario?

[Gooshin]

reason being,

unfortunetly there are simple too few people in the world with good business sense

your company is doing well because the people in charge have a good head on their shoulders but thats not the case for everyone

if such people got to be in places of higher power, theoretically, they would do more good for more people, and the (pick a country) economy.

the idea is to spread the benefit of good management over as large an area as possible, not focus on a specific company in one area, and to elimante these "bad business ideas" all together. There are enough scam artists that take peoples hard earned cash precicely because the market allows them to do whatever without anyone telling them early on that "hey, what your doing is going to fail, so dont do it"

your company is doing well because the people in charge have a good head on their shoulders but thats not the case for everyone

if such people got to be in places of higher power, theoretically, they would do more good for more people, and the (pick a country) economy.
"

Are you familiar with the theory of the incompetence? You are promoted till you reach the position where you are not efficient anymore and then you stay there.

[navcom]

if (big if) there was a governing body in power that had the capabilities of properly controlling the market, would this not be the better scenario?

As you said, there are a lot of dumb people out there. There are also a lot of people who do not care about the economy...only themselves. If we create a beauracracy and give them the power to control the market, what do we do when one of those gets ahold of that power? What if that person were, say, George Bush?

I'm a very big advocate of allowing people to make their own decisions, even if they are the wrong ones. If we truly let the government stay out of the way as much as possible, the wrong decision-makers will learn from their mistakes and wise up. If we control them and cater to them, they have no incentive to wise up. That is what we have now. We have many people who want to reap the profits in good times and socialize the risks in bad times. There is a limit to the tax resources available for the government to take before the economy collapses. The government cannot grow the economy, only take from it. It produces nothing because it relies on the people it is trying to "help" for it's income.

There is no system in which a business has zero risk. In a capitalist system, when people make mistakes, they have to live with them personally and can always try again. In a controlled system, if the elitists make a mistake, everyone else has to live with it and there is a good chance everyone will be down for the count. And on top of it, whoever has the power to control the economy also has the power to limit what you can make, limit what field you go into, what house you live in, what car you drive, and .... *gulp*.... what camera you can own...all under the guise of "helping" you.

Today in the US, we have a lot of government regulation, more than in several other countries, which is one of the reasons we are in the situation we are in...we didn't allow those that should've failed to fail. It's much easier to act with less integrity or make the easy decision when you know someone is there to bail you out. What we have today is not traditional American capitalism.

Fannie and Freddie were encouraged for several years to give out bad loans. "Don't worry, the government will help you if they default" was the response. Well, they did, and here we are. Banks were even threatened with lawsuits if they didn't provide high risk loans. They did, and here we are. That was all government regulation and policy aimed at "growing the economy". All it has done is take money from the economy and further stunt it's growth.

Today's US federal government is the absolutely perfect example of why we DON'T want a federally-controlled market economy. I'd much rather be left in a system where I incur the risk on my own, even one that is in the midst of correcting itself, than one where I am not allowed to do my own thing and must submit to the whims of an elitist federal board and hope they don't grow corrupt or make the completely boneheaded decisions that they currently are making.

[woof]

[withdrawn]

[Nesster]

Funny, I thought this was headed in a different direction.

I won't be spending $$ on new camera equipment, as I'll be trying to make ends meet (as I work in the financial industry, I'm feeling a whole lot less flush these days).

Multiply that by however many people you want, the result is not just the Circuit Cities but also the manufacturers, parts suppliers, middle men, and assorted hangers-on are in for lean times.

[Clicker]

There will be more sale of disposable "film" cameras