Once upon a time, in India there was a company called Pal

Automobiles which used to make Fiat cars (I think under license with Fiat). Later the same car was branded as Padmini. At one point, there were only three car brands – Padmini, Ambassador and Standard. Padmini used to sell at a huge premium. There was a waiting list of nearly 5-6 years. The Padmini brand was a premium brand.

Today, the company, the brand and the car does not exist anymore.

Why? Well most of you will come up with numerous reasons for failure of Padmini car including old technology, customer dissatisfaction, ineffective marketing strategy, high price, ineffective top management and poor quality. But none of these are the reasons why the company and the brand failed. I am sure you are astonished and maybe perplexed. You must be thinking that you have listed out probably all the reasons why products fail and still not hit bull’s eye.

Now let me add a twist to this scenario by stating that I can bring Padmini car to its original glory, that is, you will have to wait for years to get the car as well as pay a premium. I will do this by not changing anything, that is, there will be no change in quality, price, production technique, positioning, advertising and strategy as far as the Padmini Car is concerned. However, for me to achieve this, I will take just one action.

I know what you must be thinking. This guy is crazy. I hate to disappoint you but I think am quite sane.

Now if you would like to accept the challenge and think of what action I will take to bring Padmini cars back to its original glory, press the stop button now. Stop playing the video. Once you have found the answer, you can compare your answer with mine by playing the video again. More important than coming up with the answer is the understanding of the underlying concept and how it can assist you in achieving success in the business world.

I hope most of you accepted the challenge and are playing the video to compare your answer. The one action that I will take to bring back Padmini car to its original glory is that I will remove all the competition that came later. You will have just three brands of cars to choose from from, that is, Ambassador, Padmini and Standard. Just like before, with only three brands to choose from, don’t you think we will be back to a market situation where we will again start paying premium for a poor quality car. We, as customers, will have no choice. If we want to buy a car, we will have to choose from one of the brands available.

I am sure you must be thinking, this guy is really crazy. How can we remove competition? You are right as well as wrong. You are wrong because I still claim that I am not crazy. You are right because I agree that we cannot remove competition. To bring out the importance of competition, I had no choice but to find an interesting way to get your attention and at the same time highlight the importance of competition to your business as well as for success in your professional career.

Padmini car’s failed not because its customers one day decided that enough is enough and that we will not buy a poor quality car and pay premium for the same. Customers were not the proverbial “Kings.” They were beggars. They had no choice but to buy any one of the three models offered by the manufacturers at that time. Customer was certainly not the “King,” Customers became more powerful once other car manufacturers like Maruti, Daewoo, Ford, General Motors, Hyundai entered the Indian car market and offered better options to the customer. With a host of new car models available, customers could now truly exercise their power. After the competition gave more choices to the customer, customer truly became the “King.” He exercised his right to not to buy the Padmini car because better quality cars were now available. So you can see that it was competition that brought about the failure of Padmini cars by making better choices available. Customer was not the “king” before the competition arrived. He became the “King” after the competition arrived and gave choices to the customer to exercise his power as a customer.