The Rise And Fall Of The J. Peterman Company Essay

Case 1: THE RISE AND FALL OF THE J. PETERMAN COMPANY
1.There are many key points that caused the initial success of the the J. Peterman Company, but the most important one was because the company had a clear positioning: sell apparel goods that were matched with “unique”, “authentic”, “romantic”, “journey”, “wondrous”, and “excellent” concepts, by catalog. The company produce coats, ran some ads on New Yorkers, mail catalogs directly to customers, sold products, and used the revenue to produce more coats. Everything was within a simple but efficient cycle. Also, the company closely stick with the six-words concept they made for every product they produce. Not only the customers but also the employees who worked in the company had an idea about
The eventual failure of the company were mainly due to the booming and rapid growth business of the company, which made what initially secure become out of control. However, when facing the challenge of how to adapt the growth, which path the company should take and what decision can be make, John Peterman did not have a clear mind because of the lack of experience. Quick expansion leaded to large recruit and product expansion, but it also leaded to the fray of companies’ culture and the mismatch of six-word concept. There was no efficient organization structure within the company, and people who worked there had no idea about what they should do, how to do and what the standard they should be base on. As mentioned in the article, the more item offered by the company, the less “special” or less “Peterman” each item became, because the products were no longer embodied the meaning and elements of the company. Then, these change negatively influenced the sales and the company wanted more capitals, more professionals and more channels to boost the sale, which worse the situation and caused the
John Peterman, as the founder and main manager of this company, did not have enough no experience in the catalog and apparel business nor dealing with the repaid growth. Therefore, he always thought that he did not have time to slow down and think, because all he did was to respond to a situation passively, which would limit the solution making processes. For example, when the capital was not enough, he asked the bank to get more capitals, but the money was not used at the right place, which result in high fixed cost and high inventory and liquidity crisis. The cycle was limited by itself and one problem only had one solution, so when one section went wrong, the whole cycle went down. As a general manager, experience and critical thinking are very important. Also, instead of relying on people employed, a manager should play a leading role that could think individually and make right decision with carefully