iloco opened this issue on Apr 24, 2006 · 46 posts
impish posted Thu, 27 April 2006 at 7:36 AM
"Someone above said DAZ is "high volume-low profit"- - I don't think they are "low profit" if they can buy another significant software compant for millions of $$$."
I would be someone I believe. Maybe I should explain this. High volume - low profit does not mean Daz as a whole makes a small profit. It means each sale they make has a small profit. Like a supermarket selling bakedbeans. Each tin of beans has a small profit but a high volume of sales. This results in a large profit when all the small profits are added up. Most businesses can be divided into one of four types:
Low Volume / Low Profit
Low Volume / High Profit
High Volume / Low Profit
High Volume / High Profit
Is bad because it means you probably won't survive (think a car maker on the road to ruin)
Is good if you want exclusivity (think a sports car maker) often associated with more features, better design and exclusive brands.
Is good if you want to go for the mass market but your often looked down as the cheap alternative ( think of a baked bean company).
If you can do this you've got it made. Very few companies ever achieve this.
Hope that clears up any confusion about what I was saying about Daz.
Cheers Mark
http://impworks.blogspot.com/