dpd1 - 11:08 pm on Dec 23, 2011 (gmt 0)
I think when a company is that size, it becomes too easy for the fundamentals to be lost. They can't see the forest through the trees. There's too many people involved, and nobody can see a big enough picture to really make the right calls. I guarantee you that their upper management is completely clueless as too how this happen, but some little guys down in some obscure purchasing department is going... 'I told you so'.
Plus, you've probably got a whole floor of accountants sitting there going... 'Why are you buying a single item more than what we are forecast to sell'? And the company is public, so that adds in a whole other set of nonsense that factors into their decision making, which often has nothing to do with good service, and is more about pinching pennies and profit margins. If little guys screw up on purchasing, they have to get hold of maybe 50 more of something. If somebody their size screws up, they have get 5000 more of something. Big difference.
The public wants the rock bottom prices, but these guys have to balance on a wire to make it happen, and then it all comes crashing down the second something goes wrong.