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Thursday, July 16, 2009

Cost v. Quality

What do you do when you need to respond to outside pressures, like cutting costs for example? Something has to give, right, but the choices you make can have long range implications.

When Martin Guitar was faced with that question, they decided they could not compromise the quality of their instrument. After all, that's what their reputation was built upon, and they knew that if they reduced quality they'd find themselves on a slippery slope. After all, Martin guitars have been the first choice of music greats like Elvis, Gene Autry and Eric Clapton -- who once said if he could be reincarnated as anything, he'd want to be a Martin guitar.

So they took another approach. Quality guitars are made by hand, and Martin did not want to lay off workers during the downturn. So they decided to produce the guitars just as they always had, but without the decorative inlay pattern that added a touch of style but didn't affect how the instrument performed. They picked this option during the depression and it kept the company humming along. You can read the whole story in the WSJ.

So what's the takeaway? Cost and quality can meet in the middle. It just takes some flexibility and planning. And like Martin Guitars, keeping your eye on the big picture.

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