I want to start this adventure, proposing a discussion on one of the cornerstones of the Strategic Management : the cost advantage .
I decided to start this topic because I noticed some sensitivity to all of us translators when dealing with problems relating to tariffs, unfair competition, non-paying agencies, revenue goals, etc..
try to be brief, although it is a difficult task summarize decades of literature on the subject in a few lines. ¡A is puedo ver!
always strategic analysis has indicated in the cost advantage the main source of competitive advantage, in other words, higher profitability in long term. The cost advantage focuses on the price as the main instrument of competition. For the market of language services, in my opinion not very "differentiation", the cost advantage is crucial.
At this point, I think I have stirred anger and indignation, but how! This one has not read the comments on facebook, complaints from colleagues on the various lists, the petition against the translators Proz and other initiatives in this regard.
I do not like to argue and get into disputes sterile, but I'll give my opinion. Translating for € 3 per page, or, at € 0.01 / 0.02 per word, not only is behavior contrary to the ethical and moral principles to which everyone should strive for, but is also an attitude strongly anti-economic, or, not sustainable if not at the expense of quality, reputation, corporate image, ie, in the long run leads to failure (defined in all directions).
The interpretation of the cost advantage is not, ok, I translate to a competition and cents. a word!
NO!
The sources of cost advantage are: 1) economies of scale, 2) economies of learning, 3) process technology, 4) product design, 5) the cost of inputs, 6) the use of capacity; 7) the residual efficiency.
You believe that those who decide to compete on price, especially in the field of technical translations, do not hesitate to reflect on all these variables? I do not think so.
The purpose of this post is to try to understand with those who wish to participate, the extreme danger of such a choice is not weighted on the basis of the determinants of the cost advantage that I mentioned. Danger in ruining the brand and drag it down, but more importantly, to themselves. It is a strategic choice as powerful and dangerous.
begin with the first variable: the economies of scale .
You get economies of scale when the increase in resources (time, money, software, professional courses, management fees, etc..) In the production process (translation) causes a more than proportionate increase results (higher income).
I try not to fall into a cold technicality and to make useful and usable for all this topic and I hope to succeed. Back to our translator
competitor offering € 3 per page.
The first thing to do is point to the quantity, meaning that it must increase up to full production capacity, ie, achieve economies of scale. The main source of economies of scale and specialization .
If you offer a price so low, therefore, means that we are dealing with a super-specialist that translates years (experience curve) only one type of technical translation, perhaps from Sanskrit into Italian on issues of ornithology.
But we know that in 99% of cases it is not: try to look on the ads on Ebay, you will find listings of many translations, in fact, 3 € per page.
Besides the lure of starting a "China effect" even in the translation market, with price war consegunte trascinado all into insolvency, there is a real danger that is called " pathology short-term profit." It means: I beat the competitors, I offer € 0.01 per word and translate everything, in short, make my money!
Unless you have both a high proportion of both linguistic skills, by adopting this strategy is doomed to collapse unworthily.
Sooner or later, a prudent customer will notice your spelling, grammatical, interpretive and not call you anymore. Not only will trigger the most powerful marketing tool: word of mouth. You have reached the goal of being recognized by the market as the worst translator in existence.
In this way, therefore, leads to two goals at once:
1) will ruin the market
2) it puts an end to your career before you start.
In the next post, I'd like to continue the presentation of the other determinants of cost advantage. In the meantime, let me know what you think. I am open to suggestions and constructive criticism, maybe I wrote endless nonsense. Tell me! Marcello
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