For each of 12 Mondays from November through January I am summarizing one of my original ideas.
10. There are three distinctly different kinds of commerce. Since I have been giving advice for half a century to thousands of businesses it is obvious to me.
The three kinds of business are: trade, industry and clientry.
Trade is universal on the planet. It is the sale of cigarettes between prisoners. It is the flower shop where the owner goes to the flower Mart every morning. It is also Mitsui and Itochu with hundreds of billions of dollars trading lumber for coal for pork. Trade is always designed so that each single sale provides enough net revenue to replace the product sold and survive to the next sale.
Industry is what has changed the world over the past two centuries. An industrial business is designed to lower costs. Costs can be lowered in many ways ranging from the most important, achieving economies of scale, to implementing technological innovation, to applying marketing ingenuity. A local business, Lowes, can be part of a large industrial company.
Clientric businesses have one objective: to maintain a lifetime relationship with the customer. Such a clientric business could be a dentist, a graphic artist, a lawyer and it can also be a large firm like an investment counselor or an international bank.
Each of these three forms of business operates differently because the objectives are different.