If you are looking for a few interesting examples of companies choosing quality of service over quick money, here are two firms that I discovered in the news today: Dogfish Head Beer and Zappos.
The Delmarva Daily Times (March 15,2011) reports that Dogfish, a well-known Delaware brewery, just decided to stop its explosive growth by pulling out of markets in four states. Sales of “off-centered beers for off-centered people” had grown into 30 states in the past 9 years. Founder Sam Calagione, a Discovery Channel minor celebrity, decided that Dogfish ramped up production too far, too fast, to guarantee quality. The expansion even resulted in shortages in the firm’s home state. Fans may be frustrated in Tennessee, Rhode Island, Indiana, and Wisconsin, but the company’s reputation for quality will be preserved.
Meanwhile, Next Montreal (March 16,2011) is reporting, very unhappily, that Zappos is shutting down completely in Canada. Here is the message that the shoe e-tailer has just posted on its website:
You are talking about Beer on St. Patrick’s Day! Coincidence, I think not!
I read with interest, and fond memories, about the brewers at Dog Fish Beer. It reminded me of the days when Coors beer was only available west of the Mississippi River As a V.I.S.T.A. volunteer (does anyone remember what that was?) living in Cleveland, Ohio, we used to pool our money and hire a friend with a van. He, of course, would make a small fortune as he drove out west and bought cases of the stuff. I can remember waiting for him to return, late on a Sunday night. The whole operation was illegal, but not in a bad way. After all, we didn’t resell it to bars or anything like that. We just wanted to get our hands on that golden brew from the Golden State.
Why was Coors only available out West? The rumor was that it was not pasteurized, and that it could not travel well. (I have to tell you, it traveled just fine to Cleveland.) Was it really a distribution problem, or just an urban myth? Or, was it a cleverly utilized promotional strategy that made Westerners feel like V.I.P.’s?
At any rate, as I sit her typing on St. Patrick’s Day, I want to thank you for getting back to the real business of Operations Management – talking about beer. You see, as I have gotten older, I don’t drink it much anymore. Talking about it is all I have left.