They have gone where no one would dare to go --- the swamplands, the corn fields, the fertile cow pastures and the water-laden stock tank areas of rural America .  They have stripped the lands of trees and sowed their unsightly-cookie-cutter box shaped homes, blighting the countryside with what many critics refer to as disposable housing...When it comes to defying all good business principles of producing a durable and lasting product, KB has truly excelled.  While most companies fail due to a bad product, negative press and their infamous reputations, KB Home has thrived on the idea that if you make it easy for customers or just build it, they will come, regardless of quality.

The history of KB Home is littered with controversy.  In 1979 the Federal Trade Commission sued Kaufman and Broad, now KB Home, for building defective homes and not handling homeowners warranty issues in a timely manner.  The penalty was minimal. They had to fix some of the homes and sign a FTC Consent Order, promising never to do it again.

Dishonesty proved to be profitable and KB was on it way to becoming a giant of the home construction industry, but once again the company got caught cheating.  In 1991 they paid a penalty of $595,000, which for a corporation of this size is merely pocket change, proving that crime does indeed pay.

Today they are an undisputed leader in the industry.  One could say they stand alone as a chief national economic indicator, essential to the growing economy.  In fact, they are the primary chief economic indicator for many rural counties that have overnight become the fastest growing populated areas of the nation.

They have gone where no one would dare to go --- the swamplands, the corn fields, the fertile cow pastures and the water-laden stock tank areas of rural America .  They have stripped the lands of trees and sowed their unsightly-cookie-cutter box shaped homes, blighting the countryside with what many critics refer to as disposable housing.

With government financial incentives and influence, the finest attorneys money could buy, and some great luck, they have become the leader in how to continually sell defective products and gain enormous profits.

When it comes to defying all good business principles of producing a durable and lasting product, KB has truly excelled.  While most companies fail due to a bad product, negative press and their infamous reputations, KB Home has thrived on the idea that if you make it easy for customers or just build it, they will come, regardless of quality. 

Formula for KB Home’s profits and overall success:

1. Target first-time-homebuyers, minorities and young people in their early 20’s.

2. Use government incentives (money) and innovative financing techniques to qualify the buyer.

3. Cut building cost whenever possible, including site preparation and foundations.

4. Build in volume with little attention to quality.

5. Build a house that appears more grandiose and bigger than the buyer’s parent’s home. After all, air space doesn’t cost more if the land is cheap and unsuitable for other homebuilders use.

6. Purchase the cheapest materials in volume.

7. Use the cheapest possible unskilled labor.

8. Become an industry leader by building enough substandard homes and eventually the lowest standard will become the generally accepted industry standard.

9. After the home has been sold, ignore all warranty claims.

10. Keep structural costs and warranty services low and the executive bonuses will be higher. 

Looking at the bottom line on a financial spreadsheet, and ignoring the massive amount of bad press and complaints, who can argue with the KB formula for success, except their long list of victims.