Originally posted by slackercruster Someone on the forum asked why companies discontinue great products. Companies are always having young guns come on board and they stir things up. Loads of engineers must keep engineering to keep their job. Companies get bought and sold, dismantled or raped and things change. An in this day and age, change usually means fudging the consumer and more $ for the gready companies.
It would be nice to depend on an stable, dependable Pentax. But history does not favor such things. That is why I stock 6 Pentax bodies all running on AA batts. I have a good supply of what I want to insure against negative change. Sure, I'd love to upgrade into high mp bodies or even FF if Pentax goes that route. But once they abandoned the AA 'in body' power source they lost me. The AA batt abiltiy was the only reason I started with Pentax digital, or I would have gone the Nikon dig route.
But as long as Pentax does not produce problem childs, they should keep their loyal crew on board.
How much more money would you pay for the attributes you desire? That is the question you must honestly answer.
The most important fact of the product quality / product pricing decision is that consumers as a group are cheap sons of bitches. Despite everything we claim here as individuals, as consumers, as a group, we
will not pay up for quality. Consequently companies drive relentlessly to lower the costs of their products so they can lower the selling prices of their products.
Here was my answer to that question. Companies aren't as evil as you imply. They are obligated to earn a return on their invested capital and produce a product that customers will buy at a price. As Plant and Equipment wears out new capital must be invested in new Plant and Equipment, which restarts the entire product/pricing/return-on-invested-capital analysis again.
Further, companies such as LoweAlpine (in the example given) were owned fundamentally buy two small families - started in 1967 by 2 guys in a garage in Denver. They as individuals have every right to retrieve the fruits of their years of labor buildng the company, so they sold it to another enterprise. That buyer has an obligation and a right to earn a return on its invested capital (unless you are a socialist and believe the government should own all capital assets on behalf of the people/laborers of the world). Once the fresh capital is invested, every product must be reevaluated in the context of its contribution to a return on invested capital. Frequently products that made sense at an older and lower cost of capital don't make sense any more at the newer and higher cost of capital. So by allowing the new buyers to get their investment back, with a profit, you are effectively paying the founders of Lowe Alpine when you buy one of the new products after they sell out to another company. Is that wrong?
Pentax was much more than just a camera company. Eyeglasses and medical devices are the most commonly known other divisions. Ever had a Colonoscopy? Pentax had been dismantling itself in small business-unit sales for several years prior to Hoya. Hoya bought the remainder of Pentax to gain the business units that could earn a return on their invested capital. Cameras did not fit in Hoya's expertise set, not could they earn a 20% ROIC (Hoya's stated standard). Hoya
could have simply closed the division or sold it for the highest "salvage value." Instead they cleaned up the Balance Sheet and Income Statement, imposed better business practices, kept the company alive and made it saleable at a better price.
Ricoh now is performing the same ROIC analysis on Pentax that any profit-seeking buyer would do. Further, having paid only $123MM for Pentax, it is readily apparent Ricoh had an understanding of
how much more capital they would need to invest over a period of years to make Pentax a signifcant additive revenue and profit generator. We can
expect Ricoh to invest capital repeatedly over several years to help Pentax return to its recent position as the third camera company after Nikon and Canon.
We just have to give them time to executre their business plan.
What's wrong with that?