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Friday, December 12, 2008

3 Tips We Learn From The Big 3 Auto Makers

The big 3 US auto makers needing bail out help from Uncle Sam can teach us all some very important lessons. It doesn't matter if we are a 1 man operation or a big company, there are reminders here for all of us.

1) Never Quit Improving Product Quality

I remember when anything made in Japan had a bad name. The cars they made were junk. The only reason they sold ANY, was that they were cheap. When you got in one of these vehicles it felt like you were climbing in a toy or a tin can.

What seemed to go unnoticed by the US auto makers was that Japan was constantly working on improving their products. The big 3 seemed bent on engineering cars that would quit right about the time the warranty ran out. So while the Japanese cars were on there way up, the US delivered some of their worst products in the mid 70's. Before they knew it, Japan had nearly caught up with them. Not much longer and the Japanese had passed them -which leads to our next tip:

2) Don't Underestimate Competition

For years GM and Ford spent the thrust of their advertising dollars blasting each other. In the mean time Japan focused on the wonderful features of their vehicles.

By the time Ford and GM stopped to look around, they were behind in sales of cars. It got worse when the Japanese started manufacturing bigger pick up trucks!

3) Marketing Only Works Long Term If You Have Quality Products

This tip overlaps a little with the first one, but now we want to tie quality in with marketing.

The biggest example I can think of when it comes to marketing inferior products has to be Microsoft. Before they had ever even thought of the visual interface provided by Windows (Any old DOS fans still out there?), Apple/Mac had nearly perfected it. However, Microsoft and Gates out-marketed Job and Apple. Now with the Vista fiasco (really is it much different than any other version of Windows we all bought - full of bugs until we all test it out for them) it looks like Mac may finally make a big run on them.

Probably a better example would be AOL. Remember those discs you used to get in the mail nearly everyday offering their dial-up service. Even for dial-up (YUK - but at the time we didn't know any better) they had about the worst service available! Yet, they were excellent marketers. So, they grabbed a majority share of the market. Sooner or later the quality caught up with them.

Some might argue that Microsoft and AOL still made a LOT of money, and that would be true. But, in the long run inferior products will always come back to haunt you, and that is what the big 3 auto-makers are feeling now. What if they never did let Japan get ahead of them in the first place. Sure, this economic slump would still hurt, but would they need to ask the government to bail them out?

When you lead the pack in your niche you can lose that fire inside of you. A certain arrogance can set in. You could easily get fat and lazy!

When billions of dollars are flowing in, it makes it easy to manage a company. The true test of an outfit is how they handle a downturn. That is when real management skill is needed.

So put these tips to work in your business. Never Stop Improving Your Quality. If there is nothing else you can do with the product, can you improve the service? Constantly monitor your competition, and stay ahead of them. Finally, keep on marketing your quality products and services. It will pay off for you for years to come!


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