LO and Big layoffs LO5531

Johanna Rothman (jr@world.std.com)
Sun, 11 Feb 1996 21:47:02 -0500

Replying to LO5503 --

At 12:48 PM 2/10/96, Rol Fessenden wrote:
>Wolfgang Schmid wonders if Goldratt's hypothesis -- that business needs to
>focus on growing sales, not limiting costs -- holds for mature businesses.
>He refers to other literature that uses examples from industries
>experiencing rapid growth or rapid change. I have the same questions.
>In the apparel retailing industry, I too have difficulty understanding how
>to attack this problem. And this is my major preoccupation. The
>environment is over-stored, and highly competitive. Customer services
>among the best companies are all virtually the same, and prices are as
>well. Very few companies -- Bean being one exception -- avoid massive
>liquidations. Price gains at this point can only be made by going
>off-shore and losing American jobs. Not a pleasant prospect.

[Rol gave several reasonable arguments]

I have one quibble with your thinking- it's way too much inside the box.
You are thinking about Bean's as a casual/work clothing supplier. WHy not
expand the notion to "complete clothing supplier of choice"? Apply mass
customization rules- be the first to sell/give customers the magic wand
that can transmit their exact measurements over the Internet/whatever to
your store, where you can tell me what will look good on me, and how long
the garment will be, and the estimated delivery time. (especially how long
it will be.:-)

Why do you think you are limited to the current business you're in? THe
whole point of Goldratt is to blow away the limiting factors, especially
the limiting thinking. (Have you read _It's Not Luck_ ? The examples there
are clearer about the limiting thinking.)

I bet if Bean's applied its management horsepower to being the clothing
supplier of choice, period, then you could easily use Goldratt's
perspectives, and become a growth industry. You don't have to supply only
office/casual clothing, you know. For a small premium, and for the ability
to shop at home, I would quite willingly buy all my go-to-costume-party
clothes, and go-to-wedding clothes - the clothes I wear once or twice a
year, and then give away just in time to get invited to something like
that again! If management chooses to only compete in one market, sure,
that market will mature. The point is to continually find new markets that
can use your capacity, and then to create new capacity to fund new


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voice:617-641-4046    fax:617-641-2764       jr@world.std.com
Management Consulting for High Technology Product Development

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