Every person and business makes mistakes and you can profit from them by being observant and learning how to avoid them in your life or business.

The recent news has talked about the bailouts that were needed by not only the financial industry but now the U.S. automakers. These manufacturers have become so large and such a large part of the U.S. economy that the bankruptcy of one or more of these companies would throw our economy into a recession if not a full blown depression.

I really wish we could afford to let General Motors or Chrysler fail because I believe they made poor business choices and did NOT plan ahead.

The American automobile manufacturers of the early 20th century were known for quality vehicles that lasted and provided value to their owners. The cars of the 1950’s and 1960’s are still revered by many and for many reasons with style and quality being two of the biggest.

Chrysler was on the verge of going bankrupt several decades ago and need government guaranteed loans to survive that mess. I think the two main reasons they were on the verge of bankruptcy were:

  1. Poor quality vehicles. The quality of there vehicles dwindled as they took cost cutting measures to compensate for poor sales, etc.
  2. Poor branding. Chrysler has a lot of models under the Chrysler brand which doesn’t dilute the brand. Their trucks and pickups are under the Dodge name which does NOTHING to help build the Chrysler brand name. The Plymouth division of Chrysler is also another division that does nothing to help the Chrysler brand as far as name recognition goes.

    These separate divisions have to brand thems3elves which creates competition for the parent brand name

    Ford has created built in competition with their Mercury brand. General Motors has created built in competition between Chevrolet, Buick, Oldsmobile and the GMC trucks.

    Prior to the mass introduction of quality automobiles from other parts of the world, these giants were able to survive and even thrive. Now that they are competing against brands outside of their close knit network, they are having to go toe to toe with competitors based on quality, price AND perception.

    Imagine that you were in a business where you were sharing suppliers, cultural values and similar goals with your competitors for about 80 years. Now try to imagine how your business would have to adapt if you suddenly had 2 or 3 new competitors from the other side of the world that have different, suppliers, different cultural values, different goals and a hunger you’ve lost over the decades.

    You would be forced to adapt very quickly, seek help from someone that can protect you from this threat or perish.

    In my opinion, the U.S. automakers failed to recognize the threat facing them, they failed to adapt to the changing landscape, they’ve existed in a state of denial and they’ve begged for increased tariffs on imports and received them.

    Because these U.S. automakers have grown big enough to account for millions of jobs and better than 15 percent of our gross national product, the government will have no choice but to prop them up.

    The lessons I think EVERY business owner needs to learn from this is:
    • ALWAYS keep your eye on your competitors. Discount none of your competitors because they might grow up to steal your business.
    • Keep your eye on new technologies and TEST the ones that look promising without spending a lot of time or money until they prove themselves.
    • Looking at ways you can create new income streams that aren’t dependent on your primary business in case the unthinkable happens and that income stream is drastically reduced or dries up completely.

    One final thought that someone else stated first. ‘Every business has a beginning, middle and end so you either plan for this eventuality or you suffer the consequences.’

    You Can Profit From Other’s Mistakes

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