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<p>First off, I’m not sure that the folks forking out the billions for new stadiums really do know how much it’s supposed to cost, as it certainly seems to be the case by all of the cost overruns that always seem to happen with regards to the stadiums that my favorite sports teams play for. {Then again, maybe the real problem is that my sports teams just happen to be poorly managed as they also seem to end up losing lots of games that they shouldn’t lose, but that only speaks to the flip side of the strategy coin: find clueless customers and milk the hell out of them.} </p>
<p>But the other obvious way is to simply offer a particular kind of service that nobody (or at least, only a few) competitors can offer. Or, even if you can’t offer such a service, make your customers think you can. To be perfectly honest, this is how strategy consulting firms like McKinsey get away with charging huge multi-million dollar consulting gigs, because the customers think they’re getting high value advice (even though, trust be said, the advice often comes down to telling the customer what they already know). After all, this isn’t just any old “advice” being given, it’s advice from McKinsey, with all of its Harvard and Stanford MBA’s, who is telling you. </p>
<p>Or, if you want an engineering example, consider IBM of the old days - their old mainframe systems were ridiculously expensive and all sold to giant corporations and government departments (because they were the only organizations that could afford it). Most of us don’t remember, but back in the old days, IBM was bigger and more profitable than the entire rest of the world’s computer industry combined. Heck, you can even look at IBM today. A far smaller and less powerful company to be sure, and one that derives most of its revenue from computer consulting & integration, but a company that still wins multi-billion dollar software consulting engagements to customers who ostensibly should know what it really costs. How does IBM keep doing it? I’m not sure, but it surely has something to do with the strength of the brand name combined with deep customer knowledge and a ‘mystique’ of safety (as the saying goes: “Nobody ever got fired for choosing IBM.”)</p>