[Management Column Vol. 32] Finding Perspectives for Classifying Management Resource Investment

basic information

Please use this as a hint for management decisions, including building a management foundation, improving management quality, cash flow management, bank relations, business succession, and restructuring after the appointment of the second or third generation. If you have any questions or inquiries when putting this into practice, please feel free to contact us.

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Applications/Examples of results

At Odakyu Department Store, it is said that they classify sales areas into three categories based on importance: self-edited sales areas, general brand sales areas, and intermediate sales areas. For self-edited sales areas, full-time employees are assigned, while temporary apparel staff handle general brands, and the intermediate areas are a mix of both. The more expensive full-time employees are concentrated in the sales areas with the highest profit margins. The business strategy aims to achieve the maximum return by concentrating resources on "strengths" as a principle. The premise supporting this strategic decision-making is the accurate "classification" of the resources being invested. As long as the classification is done properly, resource allocation can be carried out according to textbook methods. Classification looks at "profit margins," and the approach should be based on clear distinctions in profit margins. While strategy textbooks teach to differentiate resource allocation, they assume that classification has already been done, so one must first find the criteria for classification. If you want to concentrate your management resources on your company's strengths and improve performance, please feel free to consult with us. Next time, we will discuss "Considering the Influence of Work."