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Top 3 Shrewdest Business Moves

Members of the question-and-answer site Quora submitted their picks for the smartest moves in business. Here are three to study.
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Editor's note: This post has been updated to correct an inaccuracy. Philip Terry submitted the question to the Quora community, not Quora itself.

Earlier this month, Philip Terry, a member of the online question-and-answer forum Quora, asked the online community: What's the shrewdest, smartest maneuver you've ever seen in business? Users were quick to respond with their favorite stories of business prowess--citing entrepreneurs from Henry Ford and Sir Richard Branson, to the little-known inventors of liquid soap and a mucus-destroying cold medicine. Here are three colorful tales submitted by users in response to the query.

Dow Chemical

Herbert Dow founded Dow Chemical in 1895, and invented a way to cheaply produce the industrial chemical bromine in Midland, Michigan. He sold the chemical for 36 cents per pound throughout the United States--but couldn't expand overseas as the international chemical market was dominated by an incumbent company from Germany. A gentleman's agreement at the time dictated that the German company wouldn't encroach on the U.S. market as long as Dow didn't try to muscle in on chemical sales in Europe.

However, by 1904, Dow's business was struggling and he needed to expand. So he began selling bromine in England and quickly cut down the German competition--which sold its product at the fixed rate of 49 cents per pound. Outraged, the Germans began flooding the U.S. market with even cheaper bromine, on the order of 15 cents per pound, in an attempt to put Dow out of business.

That's when Dow got crafty.

He stopped selling his product in the U.S. altogether--and began buying up the German-made bromine. Then he repackaged it, sent it back to Europe, and began selling it as his own--for 22 cents less than the Germans did. The Germans couldn't figure out why Dow wasn't going out of business--or why there was such a high demand for German bromide in the U.S.--so they just kept lowering their prices to 12 cents, then 10 cents. By the time they caught on, Dow had broken the German monopoly in Europe and forced it to lower prices on its home turf. Ouch.

Minnetonka Soap

In the early 1970s, Robert Taylor--who owned then-small soap company Minnetonka--came up with the idea to sell liquid soap in dispensable pump containers. Unfortunately, he couldn't patent the product--liquid soap already existed, as did the pumps that he planned to dispense it with. Taylor worried that the larger, more established soap companies would steal his idea to bottle liquid soap into a pump dispenser, replicating his product on a larger scale than he could compete with and effectively running him out of business.

So he decided to beat them to the punch.

Taylor raised $12 million dollars--more than his company's net worth at the time--and ordered 100 million of the pump dispensers from the only two companies that manufactured them in the U.S. This order effectively purchased every pump the two manufacturers could make in the next year or two--giving Taylor a head start on the competition. Two years after this maneuver, Taylor's product SoftSoap dominated the market and was eventually sold to Colgate-Palmolive for $61 million.

Mucinex

In 2002, the over-the-counter cold medicine Mucinex burst onto the market--destroying its competition through a legal loophole. The company patented the drug's 600 mg dose and 12-hour release period, and gained approval from the Food & Drug Administration to sell its product as a non-prescription medication--then pointed out a crucial stipulation: According to law, no drug may be simultaneously sold as a non-prescription product and a prescription product using the same dose and release period.

In other words, once Mucinex--which owned the patents for all non-prescription drugs of its kind--gained FDA approval, its competitors' prescription products were deemed illegal. The FDA issued warning letters to 66 manufacturers, distributors, marketers, and retailers that sold the drug as a prescription product and eventually ordered them to cease production altogether.

Last updated: May 22, 2013

FRANCESCA FENZI | Staff Writer

Francesca Fenzi reports on entrepreneurship, technology and small business news from San Francisco. Her work has previously appeared in TIME, USA Today, Pop City and The Northside Chronicle.




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