One of the Best Business Model Innovation Stories We’ve Ever Seen

Warren Buffett once said, “If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.”

By Buffett’s reckoning, then, Marlin Steel had a terrible business 10 years ago.

In 2003, Marlin made $800,000 selling wire bagel baskets, and it was sinking fast because of newfound competition from Chinese factories, which were selling bagel baskets for $6–half of what Marlin’s baskets cost. “Marlin’s customers were switching to save $200 a store. And Marlin would never be able to match its Chinese competitors on price,” reports Charles Fishman in Fast Company.

Vicki Kossoff @ The Learning Factor‘s insight:

This niche U.S. manufacturer fended off foreign competition by radically reshaping its pricing and customer base.

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