I don’t have any reading. My point was limited to Econ 101. If you lower prices, you will sell more quantity. Also note that my point has nothing to say on margins. It’s just a simple relationship between price and volumes. To repeat, if you lower prices you will sell more quantity.
So you can’t call that an achievement; whatever words may be used to describe it, as the CFO did – “strategic focus” / “resilient demand (really!!)” .
Everything else; like ‘we sold more in domestic’, ‘we sold more shunt / less bimetal’ etc etc are explanations for the outcome. I don’t have much to say except that we should be very careful not to mix up cause and affect / stimulus and response. For instance if my employee comes and tells me that he sold more in domestic and less as exports; then was selling more in domestic which fetches less, a stimulus (i.e. did we purposely do it to make less money? wouldn’t that be dumb) or was it a response (export demand was weak so we responded by selling more domestic to keep utilisation going). He may cloud his reasoning as well as ours by saying – “I sold more domestic because demand was high”, “this is my strategic focus” etc etc; but the real reason is that he could not sell in the export market.
| Subscribe To Our Free Newsletter |
