survivor (noun, sur-vi-vor, \ sərˈvaɪvər \) principle (noun, prin-ci-ple, \ ˈprɪnsəpl \)
Definition: is a business concept stating that the most effective production approach is the one adopted by the organization(s) that can outlive its competitors in the long run. According to this idea, a competition that exists between companies that fight for the same market (regardless of their size) will eventually result in the survival of those businesses that will find the most cost-efficient method to conduct their operations. Thus, over time, organizations that adopt a more effective approach will steal the market share of less efficient companies and run them out of business.
In a Sentence:
- Adhering to the survivor principle, Michelson tasked the board with coming up with a strategy that will allow the company to reduce production costs over time.
- Structuring your business model around the survivor principle can be a dangerous endeavor. If you focus too much on how to stay competitive in three years, you might end up going bankrupt next month.
- Don’t you know about the survivor principle? It doesn’t matter if we can attract more clients with lower prices now if this approach won’t be financially viable in the long run.
Synonyms and related words: survivorship bias, survivor, objectivity principle, direct competition, consistency principle
