To end terrorism, the first step is to recognize what DOESN'T work. We might think that Israel's experiences of the past forty-five years had adequately proven that a war of attrition and tit-for-tat retaliatory bombings only increase the problem. Apparently not. The Bush Administration and our military in Iraq foolishly pursue the same worn-out methods that work well against standing armies, but fail miserably against hidden terrorist militias. Every bystander hit -- and there are over 10,000 now from the Iraq war -- generates a laundry list of friends and relatives who are now our enemies.
Instead, the war on terrorism must be a war fought in propaganda -- we should be doing everything possible to control the image of the United States abroad. There should be a Barnes and Noble being constructed on every street-corner of Baghdad. New schools with freely donated (but carefully pro-Western) textbooks should be springing up BEFORE Halliburton starts plumbing for oil. We should be dropping crates of food aid (which cost a lot less than bombs) which also are loaded with walkmen, DVD players, and Nintendo gameboys. For real-world evidence of this approach, look at the difference between the punitive treatment of Germany after WW1, and the gracious treatment of Japan after WW2 -- results: Hitler's rise to power in Germany, largely on a platform of restoring German pride, while Japan is now one of our staunchest allies, mostly because we sold them on our values. If you short-circuit the recruitment and fund-raising efforts of terrorism, you do REAL damage to the infrastructure of terrorism. Pity that Bush seems too attached to his cowboy mentality to figure that out.
Wednesday, July 11, 2007
Terrorists or friendly happy strangers?
I just watched a very powerful documentary about Palestinian children called "Death in Gaza". I was extremely moved by the harsh realities faced by children, innocent children, swept into a sad conflict. You can see how the Israeli army bulldozing Palestinian houses, leaving many innocent people homeless, could cause the fervor of martyrdom that is so prevalent in the occupied territories. I know it isn't a one-sided issue by any means, but one gets a sense that the perceived "terrorism" is a direct reaction from instability in one's life, turmoil, and general misery; the only escape comes from this notion of martyrdom, which takes on almost like a gross sect, a branch, of Islam. Israeli terror breeds Palestinian terror, and likewise.
After having read the Bush Administration's roadmap to peace last summer (I agreed with many of the notions within it but not with the timetable), I felt like a two-state solution had a plausible ending. I was deeply saddened to see that after key initiatives had come to deadline that the administration seemed to give up completely on the plan, which made me think it was all for a glossy show.
Shouldn't we aknowledge the misery shared by both sides, take on the position that peace stems from non-violence, and work on a policy that benefits a two-state solution? Why aren't we sticking with it? Terrorism seems to breed from the feeling that one's people are getting the shaft. Why don't we see this when thinking of "crushing" a force like al-Qaeda?
My point: We cannot simply snub terrorists; that is not destroying terror at its source. Paradoxically, to destroy terror, we have to help bolster those who look to fundamentalism as the answer to their hopelessly desperate situation. We have to snub their desperation and provide them with hope and opportunity. Yes, I know - easier said than done. It's a hell of a lot harder to wage war on the causes of terrorism and fundamentalism rather than simply on those who commit it. But as long as we wage war on the tactic and not the reason why the tactic is used, the war on terror as we know it will never come to an end. It is just another cold war.
I also realize the answer to this predicament isn't as simple as this, but to me it seems a hell of a lot better than the stunted ethics of the current administration towards terrorism (to be fair, I haven't seen a lot of Democrat politicians come up with any more of an enlightened answer).
After having read the Bush Administration's roadmap to peace last summer (I agreed with many of the notions within it but not with the timetable), I felt like a two-state solution had a plausible ending. I was deeply saddened to see that after key initiatives had come to deadline that the administration seemed to give up completely on the plan, which made me think it was all for a glossy show.
Shouldn't we aknowledge the misery shared by both sides, take on the position that peace stems from non-violence, and work on a policy that benefits a two-state solution? Why aren't we sticking with it? Terrorism seems to breed from the feeling that one's people are getting the shaft. Why don't we see this when thinking of "crushing" a force like al-Qaeda?
My point: We cannot simply snub terrorists; that is not destroying terror at its source. Paradoxically, to destroy terror, we have to help bolster those who look to fundamentalism as the answer to their hopelessly desperate situation. We have to snub their desperation and provide them with hope and opportunity. Yes, I know - easier said than done. It's a hell of a lot harder to wage war on the causes of terrorism and fundamentalism rather than simply on those who commit it. But as long as we wage war on the tactic and not the reason why the tactic is used, the war on terror as we know it will never come to an end. It is just another cold war.
I also realize the answer to this predicament isn't as simple as this, but to me it seems a hell of a lot better than the stunted ethics of the current administration towards terrorism (to be fair, I haven't seen a lot of Democrat politicians come up with any more of an enlightened answer).
Analysis of free markets
Let's recap the whole sordid saga about how "big, evil, corporate America" went wild and the gov't saved the day:
FACT #1: Standard Oil becomes a behemoth due to efficiency, very aggressive practices, and giving the consumer the best deal.
Quote:
Between 1870 and 1885 the price of refined kerosene dropped from 26 cents to 8 cents per gallon. In the same period, the Standard Oil Company reduced the costs per gallon from almost 3 cents in 1870 to .452 cents in 1885. Clearly, the firm was relatively efficient, and its efficiency was being transmitted to the consumer in the form of lower prices for a much improved product; for the firm, the efficiency meant additional profits.
Cheap products due to aggressive competition to give people the best product at the best value! Oh, the horror!
But, say the statists... LOOK! Standard Oil now controls almost 90% of the market! We are all doomed to suffer but for their mercy. Gov't come save us!
However, this leads to...
FACT #2: Standard Oil didn't gouge the consumers even at the height of its so-called monopoly. In fact, in order to retain its market share against would-be competitors, Standard Oil continued to improve its efficiency and continued to LOWER prices, even with 90% of the market!
Quote:
Finally, throughout the 1880—1895 period, refined oil products increased in quality, and the price to the consumer declined. Though Standard’s share of the refining market declined slightly (approximately 82 percent in 1895 compared to over 88 percent in 1879), the price of refined oil per gallon in barrels declined from 9 1/3 cents in 1880 to 8 1/8 cents in 1885, to 7 3/8 cents in 1890, and to 5.91 cents in 1897. In addition, Standard’s refining costs per gallon fell to 0.29 cents in 1896. Thus, at the very pinnacle of Standard’s alleged industry control, the costs and the prices for refined oil reached their lowest levels in the history of the petroleum industry.
So far, seems as though there is no problem--better quality at lower prices, even under the anti-trust statists' worst nightmare! But now the statists will holler: With >80% of the market, nobody will ever be able to emerge as a competitor and eventually Standard Oil will own 100% and THEN they will raise prices and screw us all! Help gov't!
Oh, but here comes the clincher...
FACT #3: Even at the height of its dominance, competitors were emerging and Standard Oil's share was falling. These competitors adopted efficient practices and smarter management in order to compete and offer prices similar to the oil giant, even though they weren't nearly as large or could control as much resources.
Quote:
By 1908 there were at least 125 independent refineries in the United States, among them Sun Oil, Union Oil, and the Tidewater company; and by 1911 there were at least 147. The petroleum industry was exploding faster and in more directions than any one man or firm could predict or control. The competitive market was taking apart Standard Oil of New Jersey’s position. As the Hidys so neatly put it: 'Thus even before the breakup of the combination, the process of whittling Standard Oil down to reasonable size within the industry was already far advanced.'
Ah, so it was the market which adapted and began to overcome the so-called monopoly without any aid from the gov't!
WHAT HAVE WE LEARNED BY THIS HISTORY LESSON?
-The left's nightmare came true! A company exploded into an almost 90% market share by shrewdly undercutting its competitors! BUT... prices were lower than ever, product quality improved, the economic boom carried on full bore, barriers to market entry were unable to materialize, the market adapted to compete, large numbers of competitors emerged, all the while consumers never experienced any of the horrors envisioned by anti-trust enthusiasts.
AND THIS IS SUPPOSED TO BE A CASE *FOR* GOV'T REGULATION AND AGAINST THE FREE MARKET??? ARE YOU KIDDING? THIS SHOULD BE THE POSTER CHILD FOR WHY FREE MARKETS WORK AND HOW THOSE WHO OPPOSE THEM RESORT TO SENSATIONALIST PROPAGANDA THAT DOES NOT FIT REALITY!
It is also the poster child for how a little knowledge (omg, Standard Oil had 90% of the market!) can be a dangerous thing in the hands of the lazy and disingenuous.
Sources of excerpts: THE PETROLEUM INDUSTRY: A Historical Study in Power, D. T. Armentano
A search of Standard Oil will yield similar findings, such as this from Wiki:
Quote:
By 1890, Standard Oil controlled 88% of the refined oil flows in the United States. Gradually, its market share fell to 64% by 1911. Standard's oil production as a percentage of total market supply fell to 11 percent by 1911, down from 34 percent in 1898. By 1911, it was in competition with Associated Oil and Gas, Texaco, Gulf Oil, and 147 independent refineries. (DiLorenzo, Thomas The ghost of John D. Rockefeller) Nevertheless, it was claimed by many to be a monopoly.
As the public became more aware of the Standard Oil trust in allowing its oil companies in different states to be headed by the same board of directors, there was more public support in calling for its dissolution. Eventually, the company was broken up after the United States Supreme Court declared the trust to be an "unreasonable" monopoly under the Sherman Antitrust Act. Thus, on May 15, 1911, though Standard Oil's share of the market had been steadily declining from 1900 to 1910 (Standard's share of oil refining was 64% at the time of the trial and in competition with over 100 other refiners), the Supreme Court of the United States ordered the dissolution of Standard Oil Company into 34 smaller companies, each with their own board of directors. John D. Rockefeller in 1897 had completely retired from the Standard Oil Company of New Jersey, though he continued to own a large fraction of its shares.
The notion that Standard was a monopoly is rejected by some economists, citing its much reduced market presence by the time of the antitrust trial. And, no one claims that they harmed consumers but rather the reverse --that their aggressively competitive practices drastically lowered prices for consumers.
We should be so lucky as to have an economic system that allows this to happen--not the opposite!
FACT #1: Standard Oil becomes a behemoth due to efficiency, very aggressive practices, and giving the consumer the best deal.
Quote:
Between 1870 and 1885 the price of refined kerosene dropped from 26 cents to 8 cents per gallon. In the same period, the Standard Oil Company reduced the costs per gallon from almost 3 cents in 1870 to .452 cents in 1885. Clearly, the firm was relatively efficient, and its efficiency was being transmitted to the consumer in the form of lower prices for a much improved product; for the firm, the efficiency meant additional profits.
Cheap products due to aggressive competition to give people the best product at the best value! Oh, the horror!
But, say the statists... LOOK! Standard Oil now controls almost 90% of the market! We are all doomed to suffer but for their mercy. Gov't come save us!
However, this leads to...
FACT #2: Standard Oil didn't gouge the consumers even at the height of its so-called monopoly. In fact, in order to retain its market share against would-be competitors, Standard Oil continued to improve its efficiency and continued to LOWER prices, even with 90% of the market!
Quote:
Finally, throughout the 1880—1895 period, refined oil products increased in quality, and the price to the consumer declined. Though Standard’s share of the refining market declined slightly (approximately 82 percent in 1895 compared to over 88 percent in 1879), the price of refined oil per gallon in barrels declined from 9 1/3 cents in 1880 to 8 1/8 cents in 1885, to 7 3/8 cents in 1890, and to 5.91 cents in 1897. In addition, Standard’s refining costs per gallon fell to 0.29 cents in 1896. Thus, at the very pinnacle of Standard’s alleged industry control, the costs and the prices for refined oil reached their lowest levels in the history of the petroleum industry.
So far, seems as though there is no problem--better quality at lower prices, even under the anti-trust statists' worst nightmare! But now the statists will holler: With >80% of the market, nobody will ever be able to emerge as a competitor and eventually Standard Oil will own 100% and THEN they will raise prices and screw us all! Help gov't!
Oh, but here comes the clincher...
FACT #3: Even at the height of its dominance, competitors were emerging and Standard Oil's share was falling. These competitors adopted efficient practices and smarter management in order to compete and offer prices similar to the oil giant, even though they weren't nearly as large or could control as much resources.
Quote:
By 1908 there were at least 125 independent refineries in the United States, among them Sun Oil, Union Oil, and the Tidewater company; and by 1911 there were at least 147. The petroleum industry was exploding faster and in more directions than any one man or firm could predict or control. The competitive market was taking apart Standard Oil of New Jersey’s position. As the Hidys so neatly put it: 'Thus even before the breakup of the combination, the process of whittling Standard Oil down to reasonable size within the industry was already far advanced.'
Ah, so it was the market which adapted and began to overcome the so-called monopoly without any aid from the gov't!
WHAT HAVE WE LEARNED BY THIS HISTORY LESSON?
-The left's nightmare came true! A company exploded into an almost 90% market share by shrewdly undercutting its competitors! BUT... prices were lower than ever, product quality improved, the economic boom carried on full bore, barriers to market entry were unable to materialize, the market adapted to compete, large numbers of competitors emerged, all the while consumers never experienced any of the horrors envisioned by anti-trust enthusiasts.
AND THIS IS SUPPOSED TO BE A CASE *FOR* GOV'T REGULATION AND AGAINST THE FREE MARKET??? ARE YOU KIDDING? THIS SHOULD BE THE POSTER CHILD FOR WHY FREE MARKETS WORK AND HOW THOSE WHO OPPOSE THEM RESORT TO SENSATIONALIST PROPAGANDA THAT DOES NOT FIT REALITY!
It is also the poster child for how a little knowledge (omg, Standard Oil had 90% of the market!) can be a dangerous thing in the hands of the lazy and disingenuous.
Sources of excerpts: THE PETROLEUM INDUSTRY: A Historical Study in Power, D. T. Armentano
A search of Standard Oil will yield similar findings, such as this from Wiki:
Quote:
By 1890, Standard Oil controlled 88% of the refined oil flows in the United States. Gradually, its market share fell to 64% by 1911. Standard's oil production as a percentage of total market supply fell to 11 percent by 1911, down from 34 percent in 1898. By 1911, it was in competition with Associated Oil and Gas, Texaco, Gulf Oil, and 147 independent refineries. (DiLorenzo, Thomas The ghost of John D. Rockefeller) Nevertheless, it was claimed by many to be a monopoly.
As the public became more aware of the Standard Oil trust in allowing its oil companies in different states to be headed by the same board of directors, there was more public support in calling for its dissolution. Eventually, the company was broken up after the United States Supreme Court declared the trust to be an "unreasonable" monopoly under the Sherman Antitrust Act. Thus, on May 15, 1911, though Standard Oil's share of the market had been steadily declining from 1900 to 1910 (Standard's share of oil refining was 64% at the time of the trial and in competition with over 100 other refiners), the Supreme Court of the United States ordered the dissolution of Standard Oil Company into 34 smaller companies, each with their own board of directors. John D. Rockefeller in 1897 had completely retired from the Standard Oil Company of New Jersey, though he continued to own a large fraction of its shares.
The notion that Standard was a monopoly is rejected by some economists, citing its much reduced market presence by the time of the antitrust trial. And, no one claims that they harmed consumers but rather the reverse --that their aggressively competitive practices drastically lowered prices for consumers.
We should be so lucky as to have an economic system that allows this to happen--not the opposite!
Tuesday, July 10, 2007
Walmart : analyzed
I last left of with...............
Let’s get back to our Sony AM/FM/CD Radio now.
‘Critical Mass’ must be reached before a Wal-Mart and a Sony agree to engage in business. Some of the components of that critical mass are:
....to continue.
Sony management has determined that they wish to sell their product to Wal-Mart.
Wal-Mart management has determined that they wish to buy and re-sell Sony product to the general public.
It is very important to understand that one could write an essay simply about all of the components that go into the decision-making regarding the above two statements. For sake of brevity here, I will not attempt to expand and list all of the key decision making points involved in this decision, other than to say that both Sony & Wal-Mart management are savvy, veteran businesspeople, and are fully aware of the risk/reward equation for both of them. There are no country bumpkins here, folks.
Let’s get down to business........
The deal is cut: Wal-Mart writes the Purchase Order. It is for 200,000 on the Sony Model 1 sku (stock kept unit). A price and delivery schedule is specified. Along with this is a set of ‘performance’ criteria that Sony must abide by, or else they will suffer ‘penalties’.
Sony makes the decision to accept the Purchase Order, along with its’ set of conditions, and the deal is sealed.
The product is shipped in accordance with the details of the P.O. It is put on the shelves at Wal-Mart. The price that it is sold for is the lowest price that it has ever been sold for, and it is clearly a ‘good deal’ to the customer. Wal-Mart sells all of the units in the time period that they had projected.
Who are the winners and/or losers in this transaction?
Sony – Winner: They sold 200,000 Model 1’s at the agreed upon price. We must assume that they are happy with the profit from this sale, or else they would not have entered into the original agreement.
Wal-Mart – Winner – They bought the Model 1’s at an agreed upon price, and sold them at a price that they determined. We must assume that since they determined the selling price, that it met their profit requirements.
Consumers – Winner – They purchased the Model 1 for a price lower than it had ever sold for. Call it what you will, I choose to call it a ‘value purchase’. A value purchase occurs when one can buy a product with a confirmed performance record for a lower price. In plain language, a truly ‘good deal’....not to be confused with so many other purported good deals that do not stand the scrutiny of investigation.
In summary: Round One of the Sony/Wal-Mart marriage is a win-win for all involved.
Let’s keep going.
Round Two: The next Purchase Order.
Sony and Wal-Mart management exchange mutual kudos’ and well-done’s to each other, and agree that they’ve gotten off to a great start. “Let’s expand our relationship” is the mutually agreed-upon sentiment.
Wal-Mart says something to the effect of.... “We had great success with the Model 1, and we’ll certainly want some more. We also think that we can be successful with your Model 2, but the price to us is more that we believe it is worth. We are prepared to buy 200,000 Model 2’s at $X price, and, by the way, we were so successful with the Model One that we are prepared to purchase 400,000 of them this time around. But of course, we must pay xx% less than our last purchase of them because we need to be able to justify both models on our sales floor.”
Sony says..... “Let us get back to you”. They caucus back at the office. Hmmmmm......
For us to be able to meet Wal-Marts volume requirements, we’re going to have to add an additional production line on the Model 1.
They are also fully aware of the effects of their first sale of Model 1’s to Wal-Mart vs. their sales of Model 1’s to other merchants. The sales numbers are in, and they sold X% less Model 1’s through all their other chains of distribution since Wal-Mart has had the product.
They crunch their numbers, and deduce that this will be only marginally profitable for them, but given all of the metrics that drive such decisions (keeping the production lines going, increasing their market share of products in that price range, etc.) they determine that it is worth it for them to reduce their overall margin on these products.
They pull the trigger and accept the P.O. Let it be noted that no one put a gun to their head......They made a business decision based upon a risk/reward ratio that they deemed acceptable.
The shipments of Model 1’s & 2’s begins to Wal-Mart. The total quantity is not shipped in one shot. There are scheduled shipments, as of course, this makes solid business sense. Let us remember that the standard ‘performance penalties’ present in all Wal-Mart P.O.’s are in effect.
The Model 2 is a success almost immediately. Model 1 sales are good, but not as strong as the first round, and with each successive shipment, the rate of sale slowly declines, and Model 1’s begin to back up.
Wal-Mart notifies Sony of the Model 1 ‘problem’. They offer Sony two alternatives: Wal-Mart will reduce/cancel outstanding orders on the Model 1 to reflect the current rate of sale, or Sony must lower the price on the Model 1 to allow Wal-Mart to do the same in an attempt to restore sales velocity to where it becomes acceptable to Wal-Mart.
Sony is now faced with a difficult decision, as we must remember that while all this is going on, Sony is not selling products in a vacuum. Although Wal-Mart is now one of their largest customers, the impact of lowering the Model 1 price to where Wal-Mart wants to sell it will mean that Wal-Mart will now be offering the Model 1 for sale at a retail price that is less than any other retailer can buy it for. It does not take a rocket scientist to understand the impact that this price adjustment will have on the rest of Sony’s distribution channel in regards to Model 1 sales.
Sony has already made the investment in parts procurement and increased production capacity to meet the original Wal-Mart purchase order.
Sony management goes back to crunching numbers, and the result is that they must accede to Wal-Marts demand.
They do so; Wal-Mart is successful in raising the rate of sale back to a level that is acceptable to them.
In the meantime, sales of the Model 1 through the rest of Sony’s distribution channel plummet downward.
Wal-Mart has now ‘captured’ the Sony Model 1 as essentially a branded ‘house model’ on which no other retailer can compete.
Let’s assess the winners/losers again after these latest developments.
Sony – Loser – They are no longer in control of the sales or marketing of their Model 1. They are locked into what has turned out to be a money-losing proposition with Wal-Mart on the Model 1. They are tied to it until they fulfill the agreement for total Model 1units with Wal-Mart, for which they have procured all the parts to manufacture.
Wal-Mart – Winner – They have maintained their operation profit margin on the Model 1, while simultaneously leveraging their buying power to the point that no other retailer can profitably compete with them on the Model 1.
Their product introduction of the Model 2 has gone well, and there is no reason why they cannot now leverage the Model 2 the same way that they did the Model 1.
Consumers – Winner – If anything, even a bigger winner than the first time around. They now can purchase the better Model 2 for a great price. They can now buy the Model 1 at an even better price than it was introduced at.
What’s next?
It’s approaching time for Sony to change its’ model assortment, as consumers always look for newer and better. How will this be dealt with by Sony, Wal-Mart and the rest of Sony’s distribution channel?
Stay tuned to part 3 of........Alice in BigBoxLand.
Let’s get back to our Sony AM/FM/CD Radio now.
‘Critical Mass’ must be reached before a Wal-Mart and a Sony agree to engage in business. Some of the components of that critical mass are:
....to continue.
Sony management has determined that they wish to sell their product to Wal-Mart.
Wal-Mart management has determined that they wish to buy and re-sell Sony product to the general public.
It is very important to understand that one could write an essay simply about all of the components that go into the decision-making regarding the above two statements. For sake of brevity here, I will not attempt to expand and list all of the key decision making points involved in this decision, other than to say that both Sony & Wal-Mart management are savvy, veteran businesspeople, and are fully aware of the risk/reward equation for both of them. There are no country bumpkins here, folks.
Let’s get down to business........
The deal is cut: Wal-Mart writes the Purchase Order. It is for 200,000 on the Sony Model 1 sku (stock kept unit). A price and delivery schedule is specified. Along with this is a set of ‘performance’ criteria that Sony must abide by, or else they will suffer ‘penalties’.
Sony makes the decision to accept the Purchase Order, along with its’ set of conditions, and the deal is sealed.
The product is shipped in accordance with the details of the P.O. It is put on the shelves at Wal-Mart. The price that it is sold for is the lowest price that it has ever been sold for, and it is clearly a ‘good deal’ to the customer. Wal-Mart sells all of the units in the time period that they had projected.
Who are the winners and/or losers in this transaction?
Sony – Winner: They sold 200,000 Model 1’s at the agreed upon price. We must assume that they are happy with the profit from this sale, or else they would not have entered into the original agreement.
Wal-Mart – Winner – They bought the Model 1’s at an agreed upon price, and sold them at a price that they determined. We must assume that since they determined the selling price, that it met their profit requirements.
Consumers – Winner – They purchased the Model 1 for a price lower than it had ever sold for. Call it what you will, I choose to call it a ‘value purchase’. A value purchase occurs when one can buy a product with a confirmed performance record for a lower price. In plain language, a truly ‘good deal’....not to be confused with so many other purported good deals that do not stand the scrutiny of investigation.
In summary: Round One of the Sony/Wal-Mart marriage is a win-win for all involved.
Let’s keep going.
Round Two: The next Purchase Order.
Sony and Wal-Mart management exchange mutual kudos’ and well-done’s to each other, and agree that they’ve gotten off to a great start. “Let’s expand our relationship” is the mutually agreed-upon sentiment.
Wal-Mart says something to the effect of.... “We had great success with the Model 1, and we’ll certainly want some more. We also think that we can be successful with your Model 2, but the price to us is more that we believe it is worth. We are prepared to buy 200,000 Model 2’s at $X price, and, by the way, we were so successful with the Model One that we are prepared to purchase 400,000 of them this time around. But of course, we must pay xx% less than our last purchase of them because we need to be able to justify both models on our sales floor.”
Sony says..... “Let us get back to you”. They caucus back at the office. Hmmmmm......
For us to be able to meet Wal-Marts volume requirements, we’re going to have to add an additional production line on the Model 1.
They are also fully aware of the effects of their first sale of Model 1’s to Wal-Mart vs. their sales of Model 1’s to other merchants. The sales numbers are in, and they sold X% less Model 1’s through all their other chains of distribution since Wal-Mart has had the product.
They crunch their numbers, and deduce that this will be only marginally profitable for them, but given all of the metrics that drive such decisions (keeping the production lines going, increasing their market share of products in that price range, etc.) they determine that it is worth it for them to reduce their overall margin on these products.
They pull the trigger and accept the P.O. Let it be noted that no one put a gun to their head......They made a business decision based upon a risk/reward ratio that they deemed acceptable.
The shipments of Model 1’s & 2’s begins to Wal-Mart. The total quantity is not shipped in one shot. There are scheduled shipments, as of course, this makes solid business sense. Let us remember that the standard ‘performance penalties’ present in all Wal-Mart P.O.’s are in effect.
The Model 2 is a success almost immediately. Model 1 sales are good, but not as strong as the first round, and with each successive shipment, the rate of sale slowly declines, and Model 1’s begin to back up.
Wal-Mart notifies Sony of the Model 1 ‘problem’. They offer Sony two alternatives: Wal-Mart will reduce/cancel outstanding orders on the Model 1 to reflect the current rate of sale, or Sony must lower the price on the Model 1 to allow Wal-Mart to do the same in an attempt to restore sales velocity to where it becomes acceptable to Wal-Mart.
Sony is now faced with a difficult decision, as we must remember that while all this is going on, Sony is not selling products in a vacuum. Although Wal-Mart is now one of their largest customers, the impact of lowering the Model 1 price to where Wal-Mart wants to sell it will mean that Wal-Mart will now be offering the Model 1 for sale at a retail price that is less than any other retailer can buy it for. It does not take a rocket scientist to understand the impact that this price adjustment will have on the rest of Sony’s distribution channel in regards to Model 1 sales.
Sony has already made the investment in parts procurement and increased production capacity to meet the original Wal-Mart purchase order.
Sony management goes back to crunching numbers, and the result is that they must accede to Wal-Marts demand.
They do so; Wal-Mart is successful in raising the rate of sale back to a level that is acceptable to them.
In the meantime, sales of the Model 1 through the rest of Sony’s distribution channel plummet downward.
Wal-Mart has now ‘captured’ the Sony Model 1 as essentially a branded ‘house model’ on which no other retailer can compete.
Let’s assess the winners/losers again after these latest developments.
Sony – Loser – They are no longer in control of the sales or marketing of their Model 1. They are locked into what has turned out to be a money-losing proposition with Wal-Mart on the Model 1. They are tied to it until they fulfill the agreement for total Model 1units with Wal-Mart, for which they have procured all the parts to manufacture.
Wal-Mart – Winner – They have maintained their operation profit margin on the Model 1, while simultaneously leveraging their buying power to the point that no other retailer can profitably compete with them on the Model 1.
Their product introduction of the Model 2 has gone well, and there is no reason why they cannot now leverage the Model 2 the same way that they did the Model 1.
Consumers – Winner – If anything, even a bigger winner than the first time around. They now can purchase the better Model 2 for a great price. They can now buy the Model 1 at an even better price than it was introduced at.
What’s next?
It’s approaching time for Sony to change its’ model assortment, as consumers always look for newer and better. How will this be dealt with by Sony, Wal-Mart and the rest of Sony’s distribution channel?
Stay tuned to part 3 of........Alice in BigBoxLand.
Denouncing Zionist Lies
"Israel takes action in retaliation for attacks and also assassinates high ranking terrorist leaders."
Nope. Not only "in retaliation". Israel has declared, formally and many times over, that it reserves the right to attack "legitimate targets" in any manner, place and time that is convenient. And it has.
Tellingly, every time the other side has formally or informally ceased fire, Israel has almost immediately attacked "legitimate targets", and more often than not, in a manner that causes tremendous "collateral damage" (aka the death and injury of innocent civilians, including children). These attacks predictably flare up the other side's anger. And we enter the vicious circle again.
"Obviously such [Israeli] retaliation could be made in a manner such that it is disproportionate to the actions being retaliated for."
That obviously came out wrong - but I won't take advantage of that slip. It's just funny!
"However, a certain degree of [disproportionality] is necessary for there to be any deterrent value to such reprisals."
Strange thing, but Israeli repression, including its wholesale slaughter of innocents and the destruction of the livelihood of others, seems to deter little, if at all, the resistance of the Palestinians. Or the terrorists. So, deterrence value = very small.
Israel leads things inexorably towards its desired objective: Israel wants to be dealing with the most extreme, radicalised, fanatical opposition possible! In this situation, no one "expects", and certainly no one "pressures" Israel to compromise, negotiate or deal! Whereas, if the other guys were (god forbid!) secular moderates, then Israel would have fewer fall-back arguments for its continuing intransigence.
"But the key question is, is the Israeli military almost every day just lobbing shells into civilian targets?"
Yes. It does.
Not "every day", of course! Nobody does anything like this "every day". But it is preposterous that someone would dispute what is being reported routinely from the region and what we have seen on TV countless times. (Even with the pro-Israeli bias of the American media, some things do slip through, you know.)
"Or shooting random Palestinians at checkpoints?"
Yes. They do.
And sometimes it's not so random either! Case in point, the shooting of a 14-year old girl, some distance away from an Israeli checkpoint. (Do you wanna read the dialogue over the military intercom? It has been made available.) The Israeli officer approaches the girl, and shoots her (that's a 14-year old, unarmed, already heavily wounded girl, right?) in the head about six more times at close range. Then he "confirms the kill". That guy was slapped on the wrist -- and only because some independent media was nearby.
Do you know how many Palestinian children have died from Israeli bullets? Or kicks in thne head? Or rockets that were "legitimately fired against a target"? Thousands upon thousands. (Even Ariel Sharon cabinet members have discreetly expressed their "discomfort" with the IDF brutality.)
And this actually constitutes daily routine for the Palestinians. Humiliation at the check points; restrictions in their everyday business life; arbitrary brutality against anyone who looks the wrong way; the occasional "stray" bullet that "regretfully" kills or maims; abductions of suspects; serial, extreme torture; total political impotence; etc etc.
Nope. Not only "in retaliation". Israel has declared, formally and many times over, that it reserves the right to attack "legitimate targets" in any manner, place and time that is convenient. And it has.
Tellingly, every time the other side has formally or informally ceased fire, Israel has almost immediately attacked "legitimate targets", and more often than not, in a manner that causes tremendous "collateral damage" (aka the death and injury of innocent civilians, including children). These attacks predictably flare up the other side's anger. And we enter the vicious circle again.
"Obviously such [Israeli] retaliation could be made in a manner such that it is disproportionate to the actions being retaliated for."
That obviously came out wrong - but I won't take advantage of that slip. It's just funny!
"However, a certain degree of [disproportionality] is necessary for there to be any deterrent value to such reprisals."
Strange thing, but Israeli repression, including its wholesale slaughter of innocents and the destruction of the livelihood of others, seems to deter little, if at all, the resistance of the Palestinians. Or the terrorists. So, deterrence value = very small.
Israel leads things inexorably towards its desired objective: Israel wants to be dealing with the most extreme, radicalised, fanatical opposition possible! In this situation, no one "expects", and certainly no one "pressures" Israel to compromise, negotiate or deal! Whereas, if the other guys were (god forbid!) secular moderates, then Israel would have fewer fall-back arguments for its continuing intransigence.
"But the key question is, is the Israeli military almost every day just lobbing shells into civilian targets?"
Yes. It does.
Not "every day", of course! Nobody does anything like this "every day". But it is preposterous that someone would dispute what is being reported routinely from the region and what we have seen on TV countless times. (Even with the pro-Israeli bias of the American media, some things do slip through, you know.)
"Or shooting random Palestinians at checkpoints?"
Yes. They do.
And sometimes it's not so random either! Case in point, the shooting of a 14-year old girl, some distance away from an Israeli checkpoint. (Do you wanna read the dialogue over the military intercom? It has been made available.) The Israeli officer approaches the girl, and shoots her (that's a 14-year old, unarmed, already heavily wounded girl, right?) in the head about six more times at close range. Then he "confirms the kill". That guy was slapped on the wrist -- and only because some independent media was nearby.
Do you know how many Palestinian children have died from Israeli bullets? Or kicks in thne head? Or rockets that were "legitimately fired against a target"? Thousands upon thousands. (Even Ariel Sharon cabinet members have discreetly expressed their "discomfort" with the IDF brutality.)
And this actually constitutes daily routine for the Palestinians. Humiliation at the check points; restrictions in their everyday business life; arbitrary brutality against anyone who looks the wrong way; the occasional "stray" bullet that "regretfully" kills or maims; abductions of suspects; serial, extreme torture; total political impotence; etc etc.
saw a GREAT quote today - basically Democrats have lost their message - No one REALLY wants more abortions - the fewer the better.
It's just that Democrats believe the woman should be making the choice for themselves, and Republicans believe THEY should be making the choice for the woman.
But it's also universally agreed among Democrats and anyone with half a [censored] brain that teaching kids about things like contraception will PREVENT abortions, but this is unacceptable to a Republican.
I know of at least one couple that tried the "pull out" method thinking this would be ok - not even close - I think she was knocked up the first time they did it. They were on a "Christian" college campus where sex was forbidden and safe sex wasn't discussed, so when they got home for the summer and got busy - they didn't realize that long before my bud shot his happy juice, he was leaking some inside her and rev'ing up for a fast dropout of college and entry into the real world.
if you give teenagers the right info, they'll more often then not make the right choices - but give them no choice, and tell them something their hormones and biological instincts KNOW is [censored], well, yah, you got more pregnant women -
Hence, time to swap some leadership in the House and Senate again - think it's gonna happen in 2006, babee....bye bye majority - LOL.
RB
It's just that Democrats believe the woman should be making the choice for themselves, and Republicans believe THEY should be making the choice for the woman.
But it's also universally agreed among Democrats and anyone with half a [censored] brain that teaching kids about things like contraception will PREVENT abortions, but this is unacceptable to a Republican.
I know of at least one couple that tried the "pull out" method thinking this would be ok - not even close - I think she was knocked up the first time they did it. They were on a "Christian" college campus where sex was forbidden and safe sex wasn't discussed, so when they got home for the summer and got busy - they didn't realize that long before my bud shot his happy juice, he was leaking some inside her and rev'ing up for a fast dropout of college and entry into the real world.
if you give teenagers the right info, they'll more often then not make the right choices - but give them no choice, and tell them something their hormones and biological instincts KNOW is [censored], well, yah, you got more pregnant women -
Hence, time to swap some leadership in the House and Senate again - think it's gonna happen in 2006, babee....bye bye majority - LOL.
RB
A response to prolifers
That you can't see how it is a womens' rights issue is beyond me. You might disagree with the right, but that doesn't change the fact that there is a clear "right" in question --- the right to control what happens to your body. To the extent that only women get pregnant, the right to control the pregnancy is clearly a womens' rights issue.
Whether the fetus is alive (or a form of life) is a different issue and regardless of how that issue is resolved, you still need to weigh the right of the woman to control her body. One could very well say that a fetus is not a life, but the woman still can't have an abortion because the needs of society to grow outweighs the rights of the woman to control her body/pregnancy. Similarly, one could argue that even though the fetus is alive (or a form of life) the rights of the woman to control her body trumps any rights of the fetus.
To suggest that the abortion question is simply a question of whether or not the fetus is a life (or a form of life) ignores a significant part of the larger discussion.
Whether the fetus is alive (or a form of life) is a different issue and regardless of how that issue is resolved, you still need to weigh the right of the woman to control her body. One could very well say that a fetus is not a life, but the woman still can't have an abortion because the needs of society to grow outweighs the rights of the woman to control her body/pregnancy. Similarly, one could argue that even though the fetus is alive (or a form of life) the rights of the woman to control her body trumps any rights of the fetus.
To suggest that the abortion question is simply a question of whether or not the fetus is a life (or a form of life) ignores a significant part of the larger discussion.
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