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Managing in a Time of Great Change by Peter Ferdinand Drucker

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CHAPTER THREE

The Five Deadly Business Sins

THE PAST FEW YEARS have seen the downfall of one oncedominant business after another: General Motors, Sears, and IBM, to name just a few. But in every case the main cause has been at least one of the five deadly business sins—avoidable mistakes that will harm the mightiest business.

The first and easily the most common sin is the worship of high profit margins and of “premium pricing.” The prime example of what this leads to is the near-collapse of Xerox in the 1970s. Having invented the copier—and few products in industrial history have had greater success faster—Xerox soon began to add feature after feature to the machine, each priced to yield the maximum profit margin and each driving up the machine’s ...

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