Shop A may charge you more for the same product than Shop B for a variety of reasons. If Shop A provides air-con while Shop B doesn’t, shoppers may still buy from them. If Shop A has spent more on renovations and made their environment more pleasant and attractive, buyers may still flock there. Even if Shop A had splurged on salaries and employed the ladies from Deal or No Deal to be their shop assistants, they might be able to price their products higher than Shop B which employs study mamas.
But what if Shop A has no clear advantage over Shop B? What if they provide exactly the same service but Shop A charges higher because:
1. They renovate 2 times a year.
2. They throw away their perfectly functional equipment and upgrade/update them every few months.
3. They have a $3000 pm manager in charge of toilet rolls.
When a competitor is able to provide the same standard of service for much less (say about 80% less), we would all be curious to find out how they manage to do it. We would all want, not only to learn from them, but to find even more cost-effective ways to run our businesses and beat the competition. A business in the real world has to keep changing and restructuring to remain competitive. It has to trim fat and cut wastage. A business can only continue to go about its cost-ineffective ways and insist that consumers have to live with its system and pay more if there is no Shop B around.
There are many Shop As in Singapore. And their continued presence is an indication of what a forgiving, compassionate socciety we are. If we were really Singapore Inc, we would have abolished all the cost-effective systems, convoluted corporate structures, wastage and overspending. Judging from our silence and tolerance, we are clearly not Singapore Inc. Such nice people we are. Does anyone know how I can set up a Shop A?
Dewdrop Notes
Dr Chan's Kitchen