[Search for users] [Overall Top Noters] [List of all Conferences] [Download this site]

Conference hydra::amiga_v1

Title:AMIGA NOTES
Notice:Join us in the *NEW* conference - HYDRA::AMIGA_V2
Moderator:HYDRA::MOORE
Created:Sat Apr 26 1986
Last Modified:Wed Feb 05 1992
Last Successful Update:Fri Jun 06 1997
Number of topics:5378
Total number of notes:38326

1765.0. "buy now or pay later" by GILBRT::BEAUREGARD (Roger Beauregard SHR1-3) Tue Oct 11 1988 19:05

    The following taken without permission from a reprint of comp.sys.news,
    oct 3, 1988.
    
    The U.S. Commerce Department last week ruled that several Japanese
    companies are selling microdisks(3.5") below fair market prices
    in the U.S.

    The agency, in a preliminary decision, slapped temporary antidumping
    duties on the Japanese manufacturers. Those restrictions could lead
    to sharp price hikes.
    
    The affected companies are Sony, Hitachi, Maxell LTD, and Fuji.
    A final decision on permenant duties will be made by early next
    year.
    
    
    The moral of the story is...
    
    Get down to BJ's and buy up the Maxell 3.5" disks. $12.95/Box of 10   
    or, I think Lechemere has Sony on sale for $17.50/Box of 10.    
                                                                    
    
T.RTitleUserPersonal
Name
DateLines
1765.1dumping?SAUTER::SAUTERJohn SauterTue Oct 11 1988 19:4814
    What is this "dumping" business, anyhow?  Does anybody have any
    authorative information on what constitutes "dumping"?
    
    On a TV show a while ago I heard a former Japanese bureaucrat claim
    that the determination of "dumping" involved examination of the
    manufacturing and distribution costs, plus 20% profit.  If you sell
    for less than the price determined by this formula (which I have
    probably over-simplified, but you get the idea) then you are "dumping".
    The former bureaucrat's point was that if a company is willing to
    settle for less than 20% profit it shouldn't be accused of "dumping".
    
    Is this true?  Is "dumping" a profit-maintenance program?  If so,
    it's just another word for protectionism.
        John Sauter
1765.2Dumping? duuuh.RAVEN1::EVERHARTKeep them away!Tue Oct 11 1988 20:4024
    re .1
    
    	I don't know what dumping is either, but if the formula you
    just described is the limitation for it, then it is a good idea
    to penalize foreign companies from "dumping."  I may be wrong, but
    I don't believe Japan has any anti-trust laws.  Therefore, a Japanese
    company can grow to such a point that it could AFFORD to sell for
    a much smaller amount of profit, perhaps even at a loss for a while.
    By doing so, it ends up pushing United States industries out for
    business, some of which merge with the japanese company, making
    the trust larger and more powerful.  As you can see, this eventually
    becomes a serious problem.  So, good ole Uncle Sam steps in and
    prevents this from happening the best way he knows how.  Of course,
    you can look at this intervention as detrimental because US industries
    are no longer forced to "get their act together or give it up."
    
    	OK.  I'm through being boring.  These opinions are my own, and
    in no way reflect anyone elses except by chance.
    
     - Chris
    
    P.S. (I don't know why I included this.  I'm sure no one cares.)
    
         
1765.3I wouldn't trust the Japanese definition any more than the government'sSTAR::BANKSIn Search of MediocrityTue Oct 11 1988 21:1742
    The generic definition of dumping is just "predatory pricing", and
    in particular, selling something at a loss (less than 0% profit)
    for the express purpose of undercutting the competition to force
    them out of business.  This is a bad monopolistic practice.
    
    Not that it's the same definition our government is using.  I don't
    know what definition our government is using, and I don't know that
    I'd trust them to be entirely objective about this.
    
    At the same time, I don't know that I'd trust a Japanese bureaucrat
    to be any more objective about this.  If they (the Japanese companies)
    were guilty of dumping (and I don't know if they are or aren't),
    it'd be in their best interest to have someone like this sitting
    around telling the press that they aren't REALLY dumping, just making
    less than 20% profit.
    
    That having been said, there are a couple of points to take into
    account:
    
    First, a dollar buys half as many yen as it did just a couple of
    years ago.  Instead of Japanese floppy disks costing twice as much
    now as they did when we got our Amiga, they have actually dropped
    in price a bit.  Something's got to give here.  (One example would be
    that they actually manufacture the floppies someplace which has
    a currency that hasn't gone up with respect to the dollar - the US
    for instance.)
    
    Second, Japanese tourists, while visiting the US, like to buy Japanese
    goods, because the prices for Japanese goods in the US are so much
    lower than in Japan.  Something has to give here, too. (One possible
    reason:  The Japanese distribution system is a mess.) 
    
    Are the Japanese companies dumping floppy disks?  Maybe, maybe not.
    To do so is not considered unethical according to Japanese business
    practice, so it's not entirely unlikely.  On the other hand, they've
    got slapped on the wrist so many times for it that they may be afraid
    to try it again.  On the other, other hand, every time they get
    "slapped on the wrist", what really happens is that the US government
    demands that they raise the prices a lot, which just means they
    get more profit per unit item.  I don't know if they've actually
    lost revenue from one of these wrist slappings yet (ref: autos and
    memory chips).
1765.4Sony floppies speak SpanishTLE::RMEYERSRandy MeyersTue Oct 11 1988 23:4124
Re: .3

>    First, a dollar buys half as many yen as it did just a couple of
>    years ago.  Instead of Japanese floppy disks costing twice as much
>    now as they did when we got our Amiga, they have actually dropped
>    in price a bit.  Something's got to give here.  (One example would be
>    that they actually manufacture the floppies someplace which has
>    a currency that hasn't gone up with respect to the dollar - the US
>    for instance.)

The last box of Sony floppies I bought in bulk was labeled "Assembled in
Mexico from US made components."  Previously, such floppies were labeled
"Made in Japan."

>On the other, other hand, every time they get "slapped on the wrist",
>what really happens is that the US government demands that they raise
>the prices a lot, which just means they get more profit per unit item.
>I don't know if they've actually lost revenue from one of these wrist
>slappings yet (ref: autos and memory chips).

Every time a company is prevented from dumping, the company makes more
money.  However, the company has been forced to give up the long term
benefit of decreased competition in the future for the short term benefits
of a profit this year.
1765.5Just some thoughts...PNO::SANDERSBa belaganaWed Oct 12 1988 16:19107
        "Dumping" carries with it a lot of long term implications as does
        protectionism.
        
        Scene 1)  Large company, after doing an analysis of an existing
                  market, finds weaknesses:
        
                        . Low or variable quality.
                        . High need.
                        . Good profit margins.
              
                  Company then makes the same product with paticular
                  attention to quality control.
        
                  Company adds some features, but QC is still the major
                  feature.
        
                  Company becomes known in the market and becomes
                  established.
        
                  Company does an analysis and finds that by taking a
                  short term loss, it can pick up the majority of the
                  market and force competetiors out of the market.
        
                  Once the above is accomplished the company then sets
                  the price of the product by very closely watching
                  distributors and retailers.  They do something wrong,
                  they no longer get the companies product.
        
                  Company still has QC as number one, but assigns jr.
                  Engineers to value engineer product.  Different
                  products are now available at various price levels,
                  however, product does not always function as specified.
                  Since the company has a virtual monopoly on the market,
                  it is a small problem for them as there is no longer
                  any serious competition.  However, they are off
                  battling for control of other markets and varing
                  quality in this one is ok.
        
        Current examples of the above:
        
                        . Toyota automobiles.
                        . Honda motorcycles - Harley Davidson has been
                                              fighting clones for 6 years
                                              and is the only U.S.
                                              Manufacture left.  
                        . VHS VCR's (Sony lost this battle even though
                                     their Beta format is technically
                                     superior.)
                        . CD players.
                        . Cassette audio tape (shared by Maxell and TDK).  
                        . 3.5" floppy diskettes - Sony.  
                        . TV's - Zenith is the only U.S. Manufacture
                                 left.
        
        Scene 2) Small company is a division of a larger corporation
                 whose goal is short term profit.  The company has always
                 dominated their market, until recently.
        
                 The employee's are very loyal to the company and dislike
                 what they are made to do in order to achieve the
                 corporate goals.
        
                 The company has always had a system to listen to its
                 customers, but these suggestions are now being ignored
                 and the product is being made with cheaper parts in
                 order to maximize profits in spite of quality or
                 reliability.
        
                 The company is in trouble and the corporation is now
                 looking for a buyer.
        
                 The employees get together and buy the company.  At this
                 time the competition has entered their market with
                 products that look like the companies, but is more
                 technically up to date.  The competitions quality far
                 exceeds the companies.
        
                 The company goes to the President of the U.S. for
                 protection against encroachment and gets it.
        
                 The company then concentrates on quality, and
                 incorporating technical changes in their product line.
                 They are out listening to customers again and this helps
                 to set the direction of future products.
        
                 The company regains some of its lost market share and is
                 no longer in need of protection.  The market is again
                 competitive.
        
                 That company is Harley Davidson.
        
        In Scene 1, even though protectionism was used the market was
        still lost due to the goals of the corporations and companies.
        It was lost mainly due to the lack of quality in the product.
        Little attention was paid to the customer or their needs.
        
        In Scene 2, protectionism was used, but the focus of the the
        company was quality, not profit.  The company endures, the market
        has competition, and customers are listened to.
        
        They run this kind of simulation time and time again at places
        like Harvard Business School.  When the focus becomes profit and
        not quality, the Japanese always win.  It is too bad that most
        folks who earn MBA's never learn this...
        
        Bob
1765.6Some dumpers are domesticNAC::PLOUFFCider Season Has BegunWed Oct 12 1988 16:286
    Another example of Scene 1)
    
    	.	Texas Instruments in calculators.
    
    It ain't always the Japanese.  BTW, for a Japanese view of trade
    relations, read the comic book (!) _Japan, Inc._  Very illuminating.
1765.7PNO::SANDERSBa belaganaWed Oct 12 1988 16:4137
        Your right.  Even though I tried to stay away from naming the
        Japanese, they are right up there.
        
        Funny thing is that now the Taiwanese and Koreans are starting to
        do the same thing to the Jananese.
        
        Another twist is with all the "blanket protectionism" that is so
        prevlant in the U.S., the Japanese have invested in factories
        right here in the U.S. so that their products will not be
        considered "imported."
        
        The loser right now in all of this is the American consumer whose
        job may now be lost or is now working for a Japanese corporation.
        
        Of course our government does some real dumb things to:
        
                . Tax exports - so that before devaluation, our products
                                always cost more than local products.
                                Most other countries would never pull
                                such a brain-damaged move as it makes
                                their products un-competitive.
        
                . Tax multi-national companies differently - One of the
                                "benefits" of tax reform has been that a
                                company whose base is the U.S. (such as
                                DEC) and has multi-national operations
                                gets taxed when it sets up new operations
                                in the U.S. - brick & morter, new
                                division, etc.  While a company based out
                                side the U.S. such as Phillips, who does
                                the exact same thing does not get taxed.
        
        And we elect the people that write this stuff and pay them large
        salaries!
        
        Bob
1765.8What is this doing in Amiga notes?MQFSV2::DESROSIERSTout est possible Thu Oct 13 1988 19:0213
    You (United Staters) and me are just as mutch to blame in this fiasco,
    when the bottom line is $, what is your choice? domestic or foreing?
    How many of you own imported cars, TVs, VCRs, clothes, shoes...
    don't you realise that when you buy from outside your country, money
    flows out! so do jobs.  Manufacturers are just as mutch to blame,
    when they only look to return on investment, if it's cheaper to
    make it in Japan, they will do it....because the investors (again
    you and me) request a bigger dividend.  
    
    Off the soapbox
    
    Jean