07-24-2009, 12:50 PM
OrsunVZ Wrote:This will only last so long before another company crops up to challenge that thinking by providing a set of value additions that people WANT (demand =p).
So I guess in a more short term sense you could make the arguement that supply is in the drivers seat - thing is, supply still gave them the keys.
The problem is with this retail "non DC" make up is it eliminates compitition and doesn't leave room for new idea's. A new company can't crop up with a new idea because their new idea will never see the market. You can create the greastest nail ever produced but if it does't hit the shelves you can't create demand for it.
Products contiually got better or cheaper over time in order to distiguish themselves from their competitors. This left room for an ever evolving door of producers. With choices the Demand choose who survived and who didn't.
Now days it is the suppliers who decides who lives and who dies. You have two nail companies that thrive, one that sells to Lowe's and one the sells to Home Depot. All others die because they can't get their nails to the public.
In other words short of someone plopping down 500 million to open a new Hardware chain to compete with Lowe's and Home Depot it is impossible for the public to create demand. All compitition is crushed. With out choice Demand can never drive the market.
To me that is the very definition of supply controlling demand.
Vllad