Thursday, August 4, 2011

Dangerous Dependencies And Monopolistic Profit Strategies

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If you cannot easily increase your price (if you are a monopoly, this sometimes takes a combination of lobbying, timing and other impediments to the juggernaut bulldozer of your all-but-guaranteed profits and "progress"), all you have to do to increase your profit margin during this annoying waiting period is to decrease the amount of quality of your service to customers or subscribers. AT and T is leading the way!


Please read more, and then return to this page:
  • AT&T will cut speeds for heaviest data consumers
    AT&T confirmed Friday it will slow speeds for the 5% of its subscriber base who use the heaviest amount of data -- although these users may or may not notice the speed reduction -- saying it will restore full service for these users at the start of each billing cycle. The plan, which will take effect Oct. 1, is aimed at battling congestion on AT&T's networks by targeting those who use about 12 times the amount of bandwidth than the average smartphone user. "Even as we pursue this additional measure, it will not solve our spectrum shortage and network capacity issues," AT&T said in a statement. Bloomberg Businessweek (7/29), Los Angeles Times/Technology blog (7/29)
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I believe that this marks a precipitously increasing tendency amongst utilities, dominant companies, and monopolies. It is quite the opposite (in the extreme) of the type of strategy to be deployed by smaller and growing businesses, trying to acquire market share.


In sum:

"If we cannot raise the price immediately to maintain or increase our margins, we will start cutting back on the quality of service in the meanwhile."

These folks are aerating their ice cream, cutting their drugs with powdered milk, putting up falsified meters and thermostats, and recycling their non-recyclables... short-cuts are the order of the day. If you order a soda, expect it to be mostly just carbonated water -- rich flavoring costs money.  Any more poor analogies?

In an era of decreasing expectations, this is the big business and big government view of expectation management and customer experience management (CEM).

Smaller and growing businesses, must differentiate themselves (if they wish to snare a share of the market which has been muscled and manacled by the "big boys") by doing just the opposite. They must actually capitalize on the growing discontentment of consumers and markets with the ever-disappointing  establishment and the quality control status quo.

Douglas E Castle


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