<<I look at the situation from a different perspective.>>
I do not disagree with your perspective, but your current perspective is not the same as your original point. I also do not disagree that the quality of management and the business plan can create new or different products or services that may be profitable when some original product, service, or concept is unprofitable -- management and a business plan can and frequently do change and affect perspective and thus profitability.
I do, however, continue to disagree that a product or service that is in demand can make a profit with the only relevant variables being the business plan and management, except to the extent that the demand is sustainable at a price allowing a profit.
<<If you have a product or service that is in demand, you can make a profit in providing same. The difference between profit and loss lies in the business plan and management.>>
To the extent that the business plan and-or management may redefine what the product or service is, which is what you did by changing my electric car example to a golf cart used for neighborhood transport, they may be able to create a profitable product or service -- but it will not, necessarily, be the same product or service for which there is unprofitable demand.
It may be more accurate to say, and I think we agree, that the quality of management and the focus of a business plan can make the difference between (or at least affect the extent of) profit and loss. But, this is not, in my view anyway, the same thing as saying that the difference between profit and loss for a product or service in demand is governed solely by management and the business plan since this leaves out the essential relationship between price and demand.
While the quality of management and a business plan can and often does affect the relative relationships between price, demand, and profitability, they cannot always do so to the extent necessary to achieve profitability at the price v. demand level necessary to achieve profitability.
My next example: I suspect that there is a huge demand for personal space travel. Personally, I would love to spend a view hours or days viewing the earth from the top down. But, I am 100 percent certain that there is insufficient demand at the price necessary to make it profitable. I sure would not pay it, even if I had it. Good management and a business plan may change the space travel product to commercial airline flight -- viewing it from 5 miles up is still better than viewing it from the ground up -- but it is a different product than the original one for which there is huge unprofitable demand.
There is no substitute for quality management and a quality business plan, but even the best of both cannot make gold from ocean water profitable even if they can make gold mining profitable.
Troy |
