Shipping only what sells: cutting to thirty confectionery lines (1965)

Can you decide to lose sales at the entrance to a boom?

The difficulty of this decision lies in the fact that the mechanism for generating sales was switched off not in the middle of a crisis but at a point when the business still looked as though it were growing. Judged on the single figure of sales up 2.7× in four years, no one would call the management mistaken. What was actually broken was collection and inventory, and putting a hand to that meant profit for the year would fall. The 13% decline in pre-tax profit for the year ended March 1965 can be read as that price, paid up front. That the founder personally took the front line also appears to have helped push a painful reversal through in a short time.

That said, the mould of a few products made in volume can itself become a constraint when a mature market calls for creating new demand. The more the range is narrowed, the more the company’s earnings depend on the lifespan of its existing mainstays. That the Glico of the mid-1970s kept extending the life of standards such as Pocky and Bisco through improvement was a strength and, at the same time, something that narrowed the room to generate a next pillar. How far to hold the discipline of making only what sells, and from where to allocate resources to investment in creating demand — that question of allocation carries through to the Glico that later took on functional confectionery and Office Glico.