Where do low cost competitors or "Good Deal Companies" come from?

Why does the "Good Deal Company" product look exactly like the "Better Company's" product?  Because "Good Deal companies" consist of ex-employees of "Better companies". 

"Better Companies" pay the price of having quality controlled, accurately documented sales, production, test, and engineering systems.

Future "Good Deal Company" employees presently working for "Better Company" assemble a product and begin to think they know all there is to know about manufacturing that "type" of product.  When in fact all they know is how to assemble that "model."

These employees see "Better Company" making a lot of money.  They view "Better Company's" quality controlled, accurately documented sales, production, test, and engineering systems as barriers to speedy manufacture.  They can produce a product much faster and cheaper.

"Good Deal" products can sometimes be a good product because the employees are experienced.  They hit the wall when customers need specialized products or when time changes technology, and product engineering is required...when they must build something new. 

They almost never know how to develop engineering control systems including design review.  Because of this they fail to incorporate proper tests in production.

What "Better Companies" do that "Good Deal Companies" don't

Let's return to our boat analogy

Let's say our boat sank because of vibration in the propeller shaft.  Let's say the hull design of a boat effects where the motor will be mounted and how the drive shaft is to be balanced when it is manufactured.

"Better Company"  engineered the hull and chose the drive shaft before they hired any of the employees that were to become "Good Deal Company."  Because of this "Good Deal Company" didn't  know they needed a different drive shaft for their imperceptively different hull.  They just bought the same one they always used.

"Better Company" tested each boat for drive shaft vibrations by mounting sensors at each point the drive shaft connected to the boat.

"Good Deal Company" didn't want to waste time in testing...they couldn't afford test equipment anyway.  They never once saw a boat fail.  They weren't there when "Better Company" tests found vibrations, whose causes were systematically eliminated resulting in hard earned perfected design and manufacturing.  They didn't even know they needed to test.

"Better Company" presently uses test data to continuously improve.  Vibration test data is analyzed by quality improvement groups.  They determine which point vibrates the most then design and implement engineering and production solutions.  Then they move to the next point of vibration and improve it, on and on continuously.

"Better Company" knows this problem could sink the boat...so they always test drive shaft vibration on every boat produced to insure product performance and customer safety.

Product failures usually don't happen immediately as in our example.  Sometimes your boat will sink after a few weeks, months, or years.  Although the Titanic supports our example.

Again...the three elements considered by a buyer:

Price,  QUALITY,  Service

ANYBODY can make cheap junk products and deliver them quickly