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When to Drop an Unprofitable Customer (HBR Case Study and Commentary)
內容大綱
What do you do if one of your largest and oldest customers is now one of your most unprofitable? That's the dilemma faced by Tommy Bamford, director of the fictional UK-based interior fixtures manufacturer Egan & Sons. Activity-based costing analysis reveals that Westmid Builders, a long-standing client of Egan's, has become a big drag on the bottom line. But Jane Oldenburg, a regional sales manager for Egan who has deep ties with the Westmid account, argues against dropping it. After all, Westmid has stuck with Egan through thick and thin, even as many of Egan's other customers turn to Chinese manufacturers. Besides, there's a publicity angle. Case author Robert S. Kaplan, of Harvard Business School, asks whether Egan should sever its 63-year-old relationship with Westmid. Commentary comes from Timothy J. Jahnke, of Elkay Manufacturing; Jacquelyn S. Thomas, of Southern Methodist University; and HBR's online readers.