The Changing Mattress Business

Changes in the global environment, in conjunction with the deepest and most prolonged economic downturn since the Great Depression, have started a sea change in the domestic mattress industry. The end of conspicuous consumption for big-ticket items such as mattresses and foundations, is the result of declining new home sales, tightening of consumer credit, the consumer confidence index still well below pre-recessionary levels (Wang, 2010), and unemployment hovering near 10%. In order to remain viable in rapidly changing global and task environments, mattress manufacturers will need to lower material and manufacturing costs, develop products that differentiate them from their competitors, or develop new channels of distribution for their products.

Domestic production of mattresses and foundations in 2010 was slightly below 6 billion dollars and almost 16% less than the peak mattress production of 2007 (International Sleep Products Association, 2010). Many consumers have lost confidence in the economic state of the country and therefore have begun to believe that, as Newt Gingrich said recently, "if you can’t afford to buy a house, don’t buy it" (Gingrich, 2010). The economic downturn has signaled the end of conspicuous consumption, defined as “the act or practice of spending money on expensive things that are not necessary in order to impress other people” (Merrian-Webster's Leaner's Dictionary, 2010).

Identify functional and dysfunctional control systems within your own organization

I am currently a Senior Vice-President of Sales for King Koil Licensing (“King Koil”). The company licenses mattress-manufacturing facilities, called licensees, both domestically and internationally, to produce the brands that King Koil owns. The l...

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...ving the wherewithal to maintain our lifestyle will be difficult to achieve if this strategy fails. From a professional standpoint, I have had a certain level of success as a retail executive for the past 37 years, and have built a reputation that I do not want sullied through an association with a company that fails. The mattress industry in America has contracted as consumers have suffered through these difficult economic times and will continue to face more changes in the global environment and changes in the task environment. The enterprises that remain stuck in the middle, stick to the “old ways”, react to these changes too late will likely go the way of Two Guys, Kobackers, Woolworth’s, Montgomery Ward, Circuit City, Studebaker, and too many other businesses that failed to move their organizations through the economic mine fields that confronted them.