The increasing competition in the marketplace has made the development of new products more important than ever. This is especially true for small and medium sized businesses.
Companies are constantly trying to out-compete each other in the marketplace. They have to do this because they need to make money. The problem here is that more and more companies are trying to make new products for themselves because they can’t compete with the latest and greatest products when it comes to price, features, or performance.
Companies that are the same size as their competition don’t need to make new products. They just need to produce them. However, the fact that small firms and medium size firms are more focused on making new products than medium size firms and large firms is the reason we see more and more of these smaller firms going out of business.
Companies that can afford to do this tend to produce more, and hence, more new products. Although this is also the primary reason why so many medium and large firms are going through a tough time. Small firms are in competition with large firms. Large firms are in competition with small firms. The smaller firms are the ones that have the resources to experiment and develop new products while the larger firms are the ones that are struggling to adapt to the new reality.
This is a great example of the importance of “the number of years in business,” because it’s quite common for small firms to go out of business several years before large firms do. In fact, the very last two companies that we studied that went out of business didn’t do it because they were a complete failure. They simply couldn’t compete on a level playing field.
This is why I’ve always argued that firms can only improve their products if they keep creating new products, because a new product only takes so much time to develop. In the past two years, we’ve seen a couple of examples of large firms building new products for themselves, and smaller firms struggling to adapt to the new reality. But it’s difficult to tell if these firms are truly failing, or if they’re just keeping the same products and services.
In the past two years, two large firms have announced they’re closing down (or downsizing) production lines, or taking on a new product development and manufacturing firm. This is a problem, because it means they’re not keeping the same quality of products. And as you can imagine, the cost per unit (and therefore the cost per sale) of a more expensive new product is more.
The biggest surprise in closing down a tech company out of the ground was how well it did in the first few months of the company’s existence. It wasn’t even close to the quality that was required to be a good company, or an excellent company.
As we discussed earlier, quality means that the product has to be better than what a standard of quality would require to be good. A company that had a quality of a new product that was just a little bit worse than it needed to be was just a bad company. A company that was just a little bit better than it needed to be was a good company.