The Humble ‘Burger’! A great takeaway meal or measure of Business success!
Read the story! You decide!
The Big Mac Index so described by the Economist has seen the price of McDonalds burgers more than tripled in the 40 years of reporting. And they are still in the business of selling burgers to the masses!
What is this index? The Big Mac Index published since 1986 measures the cost of a Big Mac in different countries and indicates the difference in purchasing power parity between them.
How did McDonalds do it!
McDonalds generic competitive and growth strategies are designed to maximize efficiency, minimize costs and ensure profitability. Its pricing strategy includes price bundling along with psychological pricing that encourages customers to buy more products. Its a formulae for success as profits indicate.
A different approach is used by another mega US retailer. Their strategy aims to keep prices steady following a business model, described by the company’s finance boss as ‘arrogantly simple’, to hook shoppers by offering high-quality products at the lowest prices.’ The company attributes its enduring success to this approach.
What’s your Business model? What Strategies do you use to be competitive!
During this period of inflationary pressures and price increases running a successful Business is challenging for most, whatever your industry.
You may be one of them, a small Business owner, faced with the rising costs of doing business. Increased costs for supplies, commodities, labour and energy. How do you tackle setting price points that keep customers happy while still maintaining reasonable profit margins. It's push - pull economics!
For example, a recent news headline ‘price hike on the menu for Aussie pub classic’ suggests possible further price increases to menu favourites Burgers, nuggets and chicken fillets. This follows as a major poultry producer warning of higher production costs that will need to be recovered.
Similar sentiments expressed by a local hairdresser, saying he was forced to absorb rising costs to avoid passing them onto his customers and possibly losing them as price can be the difference between someone coming to his salon or going somewhere else. He cited increased cots of electricity, rent, products and superannuation, and is the hardest time we've ever known at running a business.
Are there any answers, solutions!
Yes, consider these Strategies.
Look at margins: Most retailers boost profits by marking up prices. Short term cost impacts can be managed thru margin initiatives, but these need careful planning to avoid losing customers. Engaging with your customers is critical during these times
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