It's interesting how different people in different industries manage to make the exact same short-sighted, penny-wise, pound-foolish mistakes...
I worked at a computer company that shall remain nameless (except that it's name lives on at M:S ;-) during a time when it was basically doubling it's sales every year, going from $100M to over $2B in 6 years. During that time our goal was to design the BEST (fastest, most reliable, most feature rich) computers we could - period.
There were many of those products that were sold at a 35% NET margin. That's right boys and girls, if you bought a Portable III, or SLT/386 out of every $1000 you paid, $350 was pure gravy...
And people lined up around the block to buy those products...
Then the company brought in new management, cost-reduced the stuffin's out of the products (to make them more profitable?!), stopped making things in Houston and bought a bunch of products from 3rd world manufacturers (to be more competitive?!), used up billions of dollars to buy Tandem, DEC, and other 'who cares' companies that were 'full of synergy'.
And the result?
Well they basically went out of business - being bought out, becoming the poor stepchild of another punch-drunk company on the ropes trying to figure out what to do to make ends meet...
Sigh...
It is so VERY disappointing to see companies making the same mistakes over, and over, and over again. I guess that's why there are so many business consultants making a handsome living.