A few months ago I reported on a visit to J.C. Penney and commented on my disappointment with the look and feel of the store. What I saw was CEO Ron Johnson’s new strategy. The basis of this strategy is a return to the roots of the company through its “Fair and Square Every Day” philosophy. The problem with this strategy is that it is, in the words of Wharton Professor George S. Day, an “inside-out” strategy instead of an “outside-in” approach.

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Reed Hastings, the CEO of Netflix (NFLX) has cemented his position on my Hall of Shame. Whether hubris (outrageous arrogance) or stupidity, Netflix has taken an ill-advised price increase and transformed it into a runaway train that threatens to jeopardize the company. The story began when Reed Hastings and his management team, after doing apparently no market research, decided to raise their prices by approximately 60 percent. This action was taken amidst a continuous stream of record earnings, customer loyalty and a growing customer base.

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“The only profit center is the customer” Peter Drucker Corporations are psychopaths? Pricing errors, specifically price communication errors, are deadly for career and corporation. Witness Reed Hastings & Netflix. Corporations are people? One person’s blunder is another’s opportunity. Corporations serve needs? All of the above or pick & choose.

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In a marketing blunder that rivals Coca Cola’s (temporary) abandonment of its original formula in favor of the sweeter “New Coke,” Netflix (NFLX), despite its incredible success and customer affection, decided to raise its prices 60 percent. Stock tumbled 19 percent. One million customers instantly abandoned Netflix. Was this incredible greed, stupidity or just plain ignorance?

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Are you ready for the new paradigms? Do you have a Kindle or iPad for reading books? Do you read your daily newspaper on-line? What kind of home entertainment system do you have connected to your High Definition TV that will allow you to see movies, previously available only at the video store or from a vending machine? What must a successful company do to survive and thrive in this environment?.

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