Why do you bid low? That is the frequent question I keep getting from many people… Why I do that is because I believe in Wal-Mart strategy… I know some people are not aware of Wal-Mart strategy, I think you have to wait till I write a blog about it or you can call me to know about it…
Now coming to our topic, let me confess that I’m benefitting from this strategy… Let me share how I compensate…
Billing unused resource: In manufacturing using excess production gets maximum discounts and using excess inventory can be negotiated… Like wise I don’t want to wait to take projects that help me break even. By under bidding I’m able to bill unused resource and keep them busy, even though I’m at a loss… So, what ever I make from this idle resource is a profit…
Resource getting updated: By underbidding my resources are kept busy and they are able to stay updated with technology… Also when their efficiency also improves… This helps resource to develope their technical skills, communication skills with clients and improves theit thought process too…
Getting more exposure: By underbidding! I’m able to get more clients. Having more clients’ means you have more opportunity to cross sell & up sell other services and products… Also i keep getting repeat orders from existing clients…
Getting more ideas: There is a saying “You have 1 dollar & I’ve 1 dollar at the end of day when we exchange those 1 dollar we go with one dollar each, but when you have one idea & I’ve one idea at the end of day when we exchange those ideas we go with two ideas each”… Likewise working with more clients will help in getting more and more ideas… With the help of those ideas we are able to stay updated in business and technology…
My Reviews Increases: By working with more clients i get more reviews which intrun improves my credibility in the marketplace… High credibility will help while bidding for high volume products…
Other than those points I benefit by economies of scale and the advantage of have my development center in Tier II city is helping to keep my overheads low and I benefit from that too… Like you can see when I take one step backward I’m able to leap ahead five steps… So, when I look into it all together I’m ending up with profit rather than making loss…
AnandNataraj 