ChuckChuck;
THis is a laugh.
"The key difference between the
CWB system and a multiple-seller
system is the ability to price
discriminate. In the absence of
constraints on the quantity of feed
barley, 6-row malting barley, and 2-
row malting barley available for sale
iii
by Canada’s producers,
the law of
one price must hold for all
international and domestic barley
sales in a multiple-seller
environment.
In the model used,
multiple sellers were assumed to be
fully competitive, and this
competition resulted in one market
price for feed barley and one market
price for malting barley at any point
in time, which is a characteristic of
all competitive markets."
Talk to Monsanto. They sell their product at $10/L and $4/L. Now if that isn't price discrimination...
And guess what... I paid both of these prices myself this year... and applied them to kill our weeds.
Price Discrimination is normal in almost every business today, and the "law of
one price" is the exception far more than the rule.
I don't know if you saw this CHuckChuck...
I think it might add a little perspective to the U of S view of the world!
What determines a business success?
Suppose that in 1972, someone had asked you to pick the five companies that would provide the greatest return to stockholders over the next 20 years. Conventional economic theory would be a guide, so how would you approach the assignment?
In order to create prosperity, the companies we pick should have some sustainable competitive advantage, and something that:
a) distinguishes this organization from others in the business;
b) creates value for the industry it is involved in;
c) provides a service that is not easily copied.
Conservative economic strategy would have us pick the “right” industries as step one.
The 5 strategies for fundamental success would be:
i) difficult entry for new competitors;
ii) a product or service that isn’t easily substituted;
iii) low market power of the buyers;
iv) low market power of the sellers; and
v) cooperation between the competitors.
Economies of scale, patent protection, (a monopoly) and the largest market share would help a good selection process.
What would have been the best business strategy between 1972 and 1992? If we had taken conventional wisdom… and turned it on it’s head… we would have done the BEST!
Here are the results, the top 5 stocks, in reverse order:
Plenum Publishing, (15,689%)
Circuit City, (16,410%)
Tyson Foods, (18,118%)
Walmart, (19,807%)
Southwest Airlines, (21,775%)
Yet; Airlines, Retailing, Food processing, and publishing industries were awash is bankruptcies and massive competition during this time period.
Therefore… what made these five good businesses and what sustained their advantage?
It was not market power, technology, patents, or strategic position…
It was how they handled their work force.
CHuckChuck... I think even you would have to admit the CWB has done a VERY poor job in handling it's work force... the grain growers of western Canada!
THis is a laugh.
"The key difference between the
CWB system and a multiple-seller
system is the ability to price
discriminate. In the absence of
constraints on the quantity of feed
barley, 6-row malting barley, and 2-
row malting barley available for sale
iii
by Canada’s producers,
the law of
one price must hold for all
international and domestic barley
sales in a multiple-seller
environment.
In the model used,
multiple sellers were assumed to be
fully competitive, and this
competition resulted in one market
price for feed barley and one market
price for malting barley at any point
in time, which is a characteristic of
all competitive markets."
Talk to Monsanto. They sell their product at $10/L and $4/L. Now if that isn't price discrimination...
And guess what... I paid both of these prices myself this year... and applied them to kill our weeds.
Price Discrimination is normal in almost every business today, and the "law of
one price" is the exception far more than the rule.
I don't know if you saw this CHuckChuck...
I think it might add a little perspective to the U of S view of the world!
What determines a business success?
Suppose that in 1972, someone had asked you to pick the five companies that would provide the greatest return to stockholders over the next 20 years. Conventional economic theory would be a guide, so how would you approach the assignment?
In order to create prosperity, the companies we pick should have some sustainable competitive advantage, and something that:
a) distinguishes this organization from others in the business;
b) creates value for the industry it is involved in;
c) provides a service that is not easily copied.
Conservative economic strategy would have us pick the “right” industries as step one.
The 5 strategies for fundamental success would be:
i) difficult entry for new competitors;
ii) a product or service that isn’t easily substituted;
iii) low market power of the buyers;
iv) low market power of the sellers; and
v) cooperation between the competitors.
Economies of scale, patent protection, (a monopoly) and the largest market share would help a good selection process.
What would have been the best business strategy between 1972 and 1992? If we had taken conventional wisdom… and turned it on it’s head… we would have done the BEST!
Here are the results, the top 5 stocks, in reverse order:
Plenum Publishing, (15,689%)
Circuit City, (16,410%)
Tyson Foods, (18,118%)
Walmart, (19,807%)
Southwest Airlines, (21,775%)
Yet; Airlines, Retailing, Food processing, and publishing industries were awash is bankruptcies and massive competition during this time period.
Therefore… what made these five good businesses and what sustained their advantage?
It was not market power, technology, patents, or strategic position…
It was how they handled their work force.
CHuckChuck... I think even you would have to admit the CWB has done a VERY poor job in handling it's work force... the grain growers of western Canada!
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