At a time when business was down and everyone else was downsizing, Andrew Carnegie would have none of that. Instead of cutting costs and lowering production, he opted to manufacture steel at full capacity. Business was bad, sales were terrible, and his competition was minimising their losses. Andrew, on the other hand, elected to continue to produce steel even if selling prices were lower than the costs he sustained.
Andrew Carnegie might as well be considered a fool for such a decision. It’s not surprising that his competition would hold him in low esteem. Too bad they did not know what Andrew knew. And what he did know would become one of the reasons why he became, at that time, the wealthiest man in America.
To explain it in the simplest way, Andrew’s company had stockpiled unsold steel. By the time business started to pick up, prices also increased. Because the competition had downsized, they lost the ability to produce steel for their customers as demand started to pick up again. Who did these customers turn to, at that point? Of course, they went to the only company that had stocks available.
The prices continued to increase, and that is how Andrew Carnegie earned a fortune, when all others were barely recovering from their losses.
There is a great lesson here to be learned. In business, it’s not about having a step-by-step guide to doing a business. It’s more important to have an open mind and think forward. By having a vision of the future, of what might be, Andrew Carnegie was able to make business decisions that solidified his company as the largest in the United States of America.
In other words, when his competition was shrinking, he positioned his company to take over the market when the economy would turn for the better. And that is the value of having the foresight and ability to think outside the box.