Business Theories Explained By Stringer Bell

The Wire > every business lecture ever.

Stringer Bell was a legit business man. He knew his stuff. Here’s 4 complex business theories explained by Mr Bell.

2. Elastic vs Inelastic Products

allbusiness.com / Via All Business

The degree to which a demand or supply cure reacts to changes to price is the product’s elasticity.

Elasticity= (% change in quantity/ % change in price)

If the elasticity is greater than 1, the product is considered elastic . Less than 1 and the product is considered inelastic.

“You know what we got here? We got an elastic product. You know what that means? It means that when people can go elsewhere for they printing and copying done they gonna do it. You acting like we got an inelastic product, and we don’t.”

4. Red and Blue Ocean Strategies

Blue oceans are unknown market spces; thoose which ado not have any competition. Demand is created and growth is rapid. If a business chooses this strategy, they can choose the pricing of their product as they do not have any competition they need to undercut. It is based on a ‘4 action plan’ where the business should answer the following:

– Which of the factors that the industry takes for granted should be eliminated?

– Which factors should be reduced well below the industry’s standard?

– Which factors should be raised well above the industry’s standard?

– Which factors should be created that the industry has never offered?

This is opposed to a red ocean strategy where there are many competitors competing for every available market space (the red is supposed to be the blood of the warring competitors- nice)

Stringer’s strategy is to bring in a superior product to an already saturated market. Following the blue ocean strategy, this is a ‘new’ product as it is well above the industry standard for existing products. Bodie wants to take an aggressive red ocean strategy where he takes the market share by taking their competitors’ corners.

6. Porter’s Generic strategies

Porter described 3 types of strategies to achieve competitive advantage:

Segmentation

Cost Leadership

Differentiation

“The game ain’t about that no more. It’s about product. Yeah. We got the best goddamn product so we gonna sell no matter where we are, right? Product, motherfuckers. Product.”

Their product begins as the most superior on the market (differentiated). However, when they are faced with a market of more competitors and an increasingly inferior product Stringer is advised to drop the price, becoming the cost leader.

8. Cooperatives and Management Structures

Cooperatives are businesses owned, run by and for its members. All members share profits and have a say in the business and it is much more flexible than traditional models.

Cooperative Principles
1. Open and Voluntary Membership
2. Democratic Control
3. Limited Interest on Capital
4. Patronage Refund
5. Continuous Education and Training
6. Cooperation Among Cooperatives

“That’s why me and Prop Joe went ahead and put this co-op together.Different crews, same package. Best dope, best coke. Share and share alike.”

They do follow most of the cooperative principles. They all get a say in the business (whether Stringer actually listens is another thing), there is democratic control and all ‘workers’ are there voluntarily. Cooperation among cooperatives? Ummm…

Props to the guy who made Stringer Bell the business man he was. Mr Lucas.

Now, adjourn your asses.

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