Fewer Goods – More Profits

Dr. Michael LaitmanIn the News (from Harvard Business Review Blog): “Recent evidence suggests that the paradigm of ‘variation is value’ may be shifting. More and more, consumers are conveying their preference for fewer choices and simpler customer experiences. For example, a Forester Research survey earlier this year noted that consumers are foregoing unlimited choices in the computing world in exchange for more ‘curated’ choice, where providers sort through the possible applications for individuals and recommend a limited subset. Similarly, at a Future Agenda Conference in August, much of the conversation was about ‘less variety.’ As one professor noted, ‘fewer choices provide higher levels of satisfaction.’ 

“The narrowing of choices by these companies has not only made it easier for their customers but has also increased revenues and margins. With fewer products or services to promise, all of the associated supply chain, facility, and support processes can be slimmed down, saving considerable money and energy. Even automobile companies and airlines seem to have learned this lesson. General Motors’ process of shedding brands and narrowing down their product portfolio may have been painful, but this made it easier for buyers to understand the new GM and for the company to focus its resources on producing better cars. Similarly many airlines have cut routes and frequency of flights, giving them fuller planes and more efficient use of their assets.”

My Comment: This comes not from a desire to be the best, like nature in all its actions, but by the desire to maximize profit. Nevertheless, this is in the right direction. And then comes the right intention.

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