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Published by: Harvard Business Publishing
Originally published in: "Harvard Business Review", 2012
Version: 1 April 2012

Abstract

This HBR Case Study includes both the case and the commentary. For teaching purposes, this reprint is also available in two other versions: case study-only, and commentary-only. What do you do if one of your largest and oldest customers is now one of your most unprofitable? That's the dilemma faced by Tommy Bamford, director of the fictional UK-based interior fixtures manufacturer Egan & Sons. Activity-based costing analysis reveals that Westmid Builders, a long-standing client of Egan's, has become a big drag on the bottom line. But Jane Oldenburg, a regional sales manager for Egan who has deep ties with the Westmid account, argues against dropping it. After all, Westmid has stuck with Egan through thick and thin, even as many of Egan's other customers turn to Chinese manufacturers. Besides, there's a publicity angle. Case author Robert S Kaplan, of Harvard Business School, asks whether Egan should sever its 63-year-old relationship with Westmid. Commentary comes from Timothy J Jahnke, of Elkay Manufacturing; Jacquelyn S Thomas, of Southern Methodist University; and HBR's on-line readers.

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Abstract

This HBR Case Study includes both the case and the commentary. For teaching purposes, this reprint is also available in two other versions: case study-only, and commentary-only. What do you do if one of your largest and oldest customers is now one of your most unprofitable? That's the dilemma faced by Tommy Bamford, director of the fictional UK-based interior fixtures manufacturer Egan & Sons. Activity-based costing analysis reveals that Westmid Builders, a long-standing client of Egan's, has become a big drag on the bottom line. But Jane Oldenburg, a regional sales manager for Egan who has deep ties with the Westmid account, argues against dropping it. After all, Westmid has stuck with Egan through thick and thin, even as many of Egan's other customers turn to Chinese manufacturers. Besides, there's a publicity angle. Case author Robert S Kaplan, of Harvard Business School, asks whether Egan should sever its 63-year-old relationship with Westmid. Commentary comes from Timothy J Jahnke, of Elkay Manufacturing; Jacquelyn S Thomas, of Southern Methodist University; and HBR's on-line readers.

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