Justification on "Building an Edge over others: A different Ball Game

1. The points raised in the article doesn't mean to subdue the utility theory rather drawing inference from the same and how is value related to customer and how he perceives the same and later trying to draw the same towards financial terms.

2. Thats true the businesses will fail if a profitable model for business is not there and if the chain is not efficient and the margins are not there, but the question in hand is not to analyze the profiability and correlate the same with value addition rather to look at all sections of the society and see what is the effect of such actions by the businesses on the same. i mean to say that i may sell a mobile to you at Rs 5000 whose actual value is say Rs 8000 , in net i have lost 3000 and you have gained 3000, this is an imbalance if we look the society as a whole...going into the governance issues and the social responsibility of the corporates towards society.(though i totally agree with the segment part of the concern in your review)
3. This is what the question in hand , what we say as growth today, is it actual growth, if it would have been actual then why there is so much disparity of the rich and the poor in Indian Economy, inflation a big factor which further widens the bridge between the two ...thats what the article wish to speak about..are the corporates looking just at the bottom line or have concerns for the economic efficiencey of operations and other responsibilities which these corporates have ....for eg i m a manufacturer of a bicycle. My total cost involved in making is say Rs 1000 and after the dealer, distributor and retailor the cycle goes to the customer at Rs 2700, the mark up in between the four people in the chain is at a compunded margin of around 28%. So my question is has the customer perceived that extra 1700 that has been paid by him. This is something which is questionable.

4.The mark up between the two prices is of the services that the people in the chain are giving ...but are these margins of say 28% justified, are they over inflated are they levelled..thats what the question in hand. The prices may be over inflated because of several reasons like the inefficient utilization of resources, ineffective manpower utilization, pilfrage, cost of holding inventory etc etc and thats what is counted for in the pricing.

The concerns which are raised in this article doesn't raise an eye towards the Marketing Segment or any dept of business , rather it tries to find out the inefficiencies in the system and minimise wastage , reduce prices and increase customer value.

Building an Edge over others: A Different Ball Game

Well, there are different levels in the Organization which have to be considered while formulating a strategy and lot of review has to be done. The Businesses mainly converge themselves to the profit chain, the value chain in which the customers, sellers, suppliers, vendors, stakeholders everyone falls.
Take for example the case of a Biscuit which serves as a purpose of breakfast for the customer and which quenches his hunger, the value of that packet of biscuit is more for a customer when he is hungry as compared to when he is not and still consuming it. This brings the theory of utility in question which says that utility diminishes as the need reduces. Similar is the case here. The seller sells the biscuit and customer buys it, the seller is charging a mark up on the cost to make a profit chain and in turn adding value to the customer using it. But the value across various customers will vary as some people may not like the biscuit at all and some people like it so much that they eat it daily and some people eat it only when they are hungry.

Some customers of the same biscuit are also stakeholders in the business of the biscuit and they are benefited more if the sales of the company increase because of the value it adds to the customer and not to the people who are not stakeholders in the same business but still consuming it. There is a dual nature which is seen here. But these people may be stakeholders in other businesses and the margin of that business might be different from what is in the biscuit industry, so again there is a variation in the same. While some people are not stakeholders but just consumers and others are neither consumer not stakeholders in any business.

Here in this example , the customer who feels there is value related with the product gets benefited by the business and if he is a stakeholder he gets benefited there also as the dividend pay out may increase and for those who are not stakeholders, if they are stakeholders in other companies, there might be chances that they make up the same there or may be more or less depending on the risk appetite than an individual is ready to take, but if he is not a stakeholder in any other business there is again a probability of loosing or gaining value across others products for which he is a customer. If the customer has perceived value across other products similar in nature to the one received from that biscuit the resultant will be a zero sum. However if the same value addition is not there, he may feel himself at loss.

This are calls for research, say from a sample of products selected how many products add value to customers distinctively made company-wise and on how much he feels he has lost value. This will bring out a clear picture on the relation between the values added services of the various companies i.e. the strategy and process and the Business Margins.