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FRiSson · 11-01-2012, 05:14 PM

Smart companies know that they make a lot of money on a select number of parts, and break-even on many obscure parts. But overall, they have to make the rare parts in order to remain viable in the marketplace. Companies have learned that if they just make the popular parts (for example, those that comprise 80% of their sales) and drop the other parts, business will fall 40%. It seems strange, at first, but then you realize that people order a mix of popular and rarer parts from a company. If they cannot get the whole package at one firm, they will prefer ordering from a company that does.

There is a story about a smart MBA who analyzed a commuter airline and said, "90% of your passengers are carried on only 40% of the flights. Lets eliminate the unpopular ones and offset a lot of costs and be more profitable." The board decided to do just that, and business dropped by 40%. When they analyzed why, they found that business people need to take a late or early flight maybe once a month. When they found that they could no longer do that, they chose alternate means of transportation.

Weathertech is one confoundedly stupid organization if they think that not supplying mats for the FR-S and BRZ will not bite them in the ass.

11-01-2012, 05:14 PM	#23
FRiSson Senior Member Join Date: Jun 2012 Drives: FR-S MT Location: New England Posts: 1,081 Thanks: 118 Thanked 483 Times in 241 Posts Mentioned: 2 Post(s) Tagged: 0 Thread(s)	Smart companies know that they make a lot of money on a select number of parts, and break-even on many obscure parts. But overall, they have to make the rare parts in order to remain viable in the marketplace. Companies have learned that if they just make the popular parts (for example, those that comprise 80% of their sales) and drop the other parts, business will fall 40%. It seems strange, at first, but then you realize that people order a mix of popular and rarer parts from a company. If they cannot get the whole package at one firm, they will prefer ordering from a company that does. There is a story about a smart MBA who analyzed a commuter airline and said, "90% of your passengers are carried on only 40% of the flights. Lets eliminate the unpopular ones and offset a lot of costs and be more profitable." The board decided to do just that, and business dropped by 40%. When they analyzed why, they found that business people need to take a late or early flight maybe once a month. When they found that they could no longer do that, they chose alternate means of transportation. Weathertech is one confoundedly stupid organization if they think that not supplying mats for the FR-S and BRZ will not bite them in the ass. Last edited by FRiSson; 11-01-2012 at 10:34 PM.