|
How do Liberals View Business?
I am intrigued by how people with liberal leanings view business challenges. So I have a question based on the scenerio below:
Let's say you have a solid well run business with the following cost structure for a product that you sell for $100.
50% is cost of materials and overhead.
40% is the cost of labor.
10% is profit of which 5% you reinvest (Capital improvement, R&D, etc.)
A new competitor enters the market, selling the same product you sell for $85.
You can reduce the cost of materials and overhead by 5% right away by re-negotiating contracts with suppiers and vendors and going on a cost savings program.
In the first year you are willing to sacrifice profits ( and your reinvestment) to make up the 15% difference. and you lower your price to $85 to meet the competition.
In the second year your competiton lowers their price to $80. You can not lower your overhead any further, in fact inflation is going to make any future savings almost impossible. You have already lost one year of profits and sacrificed one year of re-investment in the business.
What do you do?
In your answer please indicate if you lean conservative or liberal.
__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."
|