When competition reduces profits, so low a high level of quality can’t be maintained companies are faced with a decision. Saks 5^th Avenue, Mc Donald’s, Rubbermaid and Porsche (Quality based vendors) concentrated on satisfying a profitable market. K Mart, Harbor Freight and countless other discount retailers offered lower quality products at lower prices.

People who are willing to risk lower standards allow discount vendors to survive. Yes survive. I don’t know of a low-end vendor that is profitable and successful over the long haul.

When the airlines were deregulated years ago, that industry was profitable and healthy. Today planes fall out of the sky or are grounded by the FCC for safety violations with frightening regularity because of lack of maintenance. In other words, quality was sacrificed. I doubt if one of the families who lost someone to discount airfares thinks it was a good deal afterwards…

Skyrocketing health care costs have forced HMO’s and insurance companies to rigidly structure the approval of expensive procedures. I know people who have a 2 – 3 day wait to see their doctor if they get sick. The sad truth is in order to keep premiums down, benefits have to be compromised. If you want quality health care without delays and hassles, you frequently have to pay cash or fight for it.

There are many examples of operating at a loss leads a business. There are even more examples of the victims who paid the price for those lower prices. If you knew you were going to lose your biggest customer because your vendor fails to maintain quality standards, I suspect you’d change vendors before hand.

It doesn’t take a rocket scientist to figure out that all sales promotions are intended to increase business. Companies that offer goods and services at a loss might believe they can benefit, but that’s not what history says.

Remember the YUGO? In 1985 it was the cheapest new car in America at $3,990. Yugo America went Bankrupt in 1989. The car was so inexpensive it suffered from serious flaws from mechanical failure to poor crash survival.

In the 1980’s, Chrysler was on the verge of going out of business. Rather than trying to operate at a loss, Lee Iacocca concentrated on improving quality, product relevance and reducing unnecessary costs; he turned Chrysler around many years faster than predicted. It is the only time I personally can remember when a large corporation actually repaid all its government loans early.

This principal is industry independent. Gillette used it to restore their ailing razor division to profitability. Lincoln Welders, once on the fast track to oblivion, is another come back success story.

While our world and economy changes, successful business practices don’t. This is demonstrated by the Re-release of a book out of print for nearly 20 years: "Corporate Turnaround: How Managers Turn Losers Into Winners!" By Donald B. Bibeault. This book looks at what it takes for a company to be successful, how to stay out of trouble and how to recover if you are in trouble.

Advanced Component Taping, Inc. was founded almost 10 years ago on a simple mission to make our customers life easier. We believe that its to our best interest to provide the highest quality workmanship possible at a fair price so that both ourselves and our customers will be successful for many years to come.

No Company can be everything to everybody. While we believe price is important, we also believe it is SECOND to Quality. Some things are priceless and a satisfied customer is one of them.