Friday, April 29, 2005
Quality and Debt-based Management
Beware Product Death Cycles
This article, from the always-excellent Randall Rothenberg-edited strategy+business, about the effect of the erosion in product quality in manufacturing, made me think of the impact of debt-driven cost management in b2b media, something I've written a lot about. There are a number of analogies worth considering.
Are the many magazines and trade shows caught up in the cycle of b2b conglomeration and dissolution run for short term profits or long-term return? Hmm, I wonder...
Grabs:
But for the past decade or so, many corporations seem to have reverted to a more purely cost-based strategy, emphasizing short-term gains from the production of cheaply made, junky products.
and
...companies that produce products with lower warranty return rates have far stronger bottom lines five years later than those whose product quality erodes more rapidly. In other words, consumers stop buying products and brands they think are likely to break down. Although many top executives may decide that product failures and loyalty erosion aren’t that important in the larger scheme of business, Mr. Brue says “that’s not a responsible fiduciary attitude.”
and
And in a world of cheap, disposable products, who will care? Maybe only the last few managers, of the last few quality brands, who, like monks in the Dark Ages, keep alive an ideal that others have forgotten — and derive premium profits from a premium audience that nobody else understands.
By the way, that last phrase sounds like an ideal definition of any well-run b2b media property--which generates premium profits from a premium audience that no one else understands or can reach like they do.
Comments
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This article, from the always-excellent Randall Rothenberg-edited strategy+business, about the effect of the erosion in product quality in manufacturing, made me think of the impact of debt-driven cost management in b2b media, something I've written a lot about. There are a number of analogies worth considering.Are the many magazines and trade shows caught up in the cycle of b2b conglomeration and dissolution run for short term profits or long-term return? Hmm, I wonder...
Grabs:
But for the past decade or so, many corporations seem to have reverted to a more purely cost-based strategy, emphasizing short-term gains from the production of cheaply made, junky products.
and
...companies that produce products with lower warranty return rates have far stronger bottom lines five years later than those whose product quality erodes more rapidly. In other words, consumers stop buying products and brands they think are likely to break down. Although many top executives may decide that product failures and loyalty erosion aren’t that important in the larger scheme of business, Mr. Brue says “that’s not a responsible fiduciary attitude.”
and
And in a world of cheap, disposable products, who will care? Maybe only the last few managers, of the last few quality brands, who, like monks in the Dark Ages, keep alive an ideal that others have forgotten — and derive premium profits from a premium audience that nobody else understands.
By the way, that last phrase sounds like an ideal definition of any well-run b2b media property--which generates premium profits from a premium audience that no one else understands or can reach like they do.
