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For Senior Management, From Senior Management – February 2011 Edition

February 7, 2011

W. Michael Scott – CEO of FMSI

Evaluating Unprofitable Locations

During this last month two major national institutions announced the closing of “unprofitable” locations in their network.  Both the United States Post Office and JC Penney came to the conclusion that they could no longer allow their most unprofitable locations to be a drain on their profits.  As I mentioned in last month’s For Senior Management message, A&P Grocery Company recently filed for bankruptcy and was previously cited in Jim Collin’s 2001 book, Good to Great, as an organization not willing to make the necessary facility improvements to keep up with the competition.  Because they face similar challenges as retail banking branch networks with unprofitable locations, I thought that  both the Post Office and JC Penney’s efforts to improve their position in the market place was very interesting.  How would you grade your organization’s evaluation of branch profitability?  When is the last time you took a closer look at your low volume branch profitability?

One Comment leave one →
  1. February 10, 2011 8:54 pm

    Postal Service begins new year with $329 million loss

    See article here: http://www.btobonline.com/article/20110210/DIRECT0202/302109992/postal-service-begins-new-year-with-329-million-loss##seenit

    Maybe they should have closed these branches last year.

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