TABLE OF CONTENTS If a company is in the business of making a product that has become indistinguishable from those of its rivals, this means that its goods have turned into a commodity. Therefore, they will sell chiefly on price. This has happened with all sort of wares, including those of technology, enabling low-cost clone makers to knock down famous names such as IBM.
There used to be a time when low cost frequently meant low quality. Today, this is not necessarily the case. Low cost has become a relative term in the sense that, with globalization, costs continue to drop. In America, the makers of many goods now live in daily terror of what is known as China price, which means that even their best price 'made in the USA' can be undercut by the much lower cost of 'made in China' products.
The answer to this challenge is steady innovation and this applies all the way to financial products. 'Clothes and automobiles change every year. But because the currency remains the same in appearance, although its value steadily declines, most people believe that finance does not change. Actually, debt financing changes like everything else', advises M. Mazur of Lehman Brothers, adding that:
We must remain inventive architects of the money business, and
We have to find new models in financing, just as in clothes and...
