[GenerWork]

They're using an absolutely ancient engine from Cummins that has probably paid off its r&d and assembly line costs at least 10x over. It has virtually no pollution controls on it like DEF or DPF. That alone is saving a fair amount of money.

[erikerikson]

/woosh

But I could be wrong. I can't know but I'm pretty sure the GP was writing tongue in cheek. As in mocking the business strategies that have been eroding the engines of our economy.

[crazygringo]

Actually, no. I don't like the modern business strategies but they are what they are.

The only reason many consumer televisions are as cheap as they are is because they're being subsidized with advertisements.

It's the same thing with the razor and blades model, where the razor is sold at a loss and the profit comes from the replacement blades. Or the game console model, where the console is much cheaper than an equivalently powered PC because the profit is made on the games.

Low upfront purchase prices are subsidized by future income streams which can be enforced with technological locking. If you don't have that, the upfront purchase price generally has to be much higher.

[erikerikson]

Huh. You're definitely authoritative on your intention. Thanks for setting the record straight and pointing out my error.

I'm confused about how you can look at all the less (or anti) functional, more expensive, disposable/fragile crap companies are producing and defend it. I've seen so much waste and stupidity in companies, so much unnecessary and artificial complexity, and so much generated information asymmetry. It doesn't add up even if the loss leader and other stories told to excuse and distract from it are powerful.

[crazygringo]

I'm not defending it. I literally prefaced my comment with saying I don't like it.

But it is reality. It's not some story being told to excuse or distract. It's just how certain business models work.

And yes, companies have waste and stupidity because human beings aren't perfect and managing companies is actually really hard. That doesn't change anything about which business models are viable and which ones are not. At the end of the day, your profit has to come from somewhere.

[erikerikson]

It seems to be that your top comment implicitly asserts that model is the one in play with Deere and the like (that they are loss leadering) and that it is necessary. Although I recognize you stated a dislike, that is what I was responding to. I suspect (but don't know not working for them or their CPA firm) that isn't the model in play but that they are implementing these policies strictly to increase profits. There's been a lot of duopoly and duopsony in the economic environment of farmers and I believe Deere had been flirting with/skirting abusive business behaviors for awhile now.

As is shown by the popularity of these alternatives, they are making a worse product at a higher price and augmenting it with abusive business policies to extract even more from farmers while many farms and farmers are failing and dropping like flies.

I suspect an adjacent part of it is anger by the population of farmers that used to actually be Deere's core market that have been fired as customers (without being told) as Deere chases the bigger customers and the economic wisdom of being a customer has disintegrated.