RE:RE:Sale price As a follow-up to this, it brings up an interesting dilemma and perhaps an opportunity. HPQ will have the cheap advantage for awhile, but business rules show that in a perceived generic market, competing on price is a failing approach long term. It's a death spiral that creates a race to the bottom as more companies rush in with scale and better pricing.
To maintain the advantage past price, companies need to find and prove other advantages, such as quality, durability, service, price-structuring (payment plans, etc), and relationship building success.
Interestingly, there's two specific and proven areas for competitiveness that could really allow for an even longer-term HPQ differentiation: go-to-market approach, and bundling.
Bundling: If HPQ can blow out their product offering, and continue to show a strong connection at the contract level to PYR, they can offer more to a buyer than just the very low price on powder. Adding in PYRs expertise and perhaps yet another use for the plasma tech in, say, assembly line optimization or in some type of furnace the end client could also utilize, as some aspect as part of a deal, could be a great differentiator.
Go-to-market strategy: altering the customer's behaviour around how and what they are buying, receiving, and perceiving about your product can have great advantage. To that end, customers using HPQ will gain some comfort knowing that:
1/ HPQ delivers a product that had far fewer steps in its production, which limits opportunity for error and improves quality control odds.
2/ The plasma process to creating powders is more environmentally friendly, by a lot. As is the overall nature of Beauce/HPQ/PYR. It's basically a one-stop shop, with less process and less transportation of materials, so less carbon footprint. HPQ powders will thus present a better green option.
So even down the road if the market competition heats up on price, as it always does, HPQ already has these two built-in advantages that should hold them in good stead.
MidtownGuy wrote:
Bit of a double-edged sword. The powder itself has been available before, but the price even for small batches for testing purposes was prohibitive. A big part of HPQ's whole selling proposition is that they can reduce that cost exponentially. So the cheap price is as much the appeal as the speed at which it seems they can make it (via far fewer steps).
Oilminerdeluxe wrote: Considering what appears to be a huge desire to use HPQ's product, one could hope the price HPQ will sell it for will not be on the "too cheap" side. I mean, if the demand is there, sell it expensive. Bernard!
December is soon here.