MarginsThe profitability of unit sales.
VolumeSales volumes. A low volume unit may be a needless distraction, particularly if it doesn't add to your customer experience and brand.
OverheadThe overhead costs that are associated with the product or service. For example, a product that requires a great deal of research and development to stay relevant in a competitive market.
Inventory ImpactA product that is tying up capital or space in your supply chain.
Production ImpactA product that is tying up your production lines. When a firm has many products production is often viewed as an opportunity cost where producing one item means you can produce less of another.brand. For example, an unprofitable product that is a symbol of your brand legacy.customer experience. For example, an optional valet service at a hotel that doesn't generate profits directly but may attract customers. risks associated with a product or service such as reputational or legal risk.quality as compared to your other products. May damage your brand or have high support costs.
CompetitionA product or service that faces increased competition such as the launch of a product with better performance and lower price than your costs.
|Overview: Product Rationalization
The process of reviewing the products and services of a firm to make a decision to retire, consolidate, maintain or improve each.