Margins
The profitability of unit sales.Volume
Sales volumes. A low volume unit may be a needless distraction, particularly if it doesn't add to your customer experience and brand.Overhead
The 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 Impact
A product that is tying up capital or space in your supply chain.Production Impact
A 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.Sustainability
The environmental or community impact of a product or service.Brand
The impact of a product or service on your brand. For example, an unprofitable product that is a symbol of your brand legacy.Customer Experience
Considering a product or service in respect to the end-to-end customer experience. For example, an optional valet service at a hotel that doesn't generate profits directly but may attract customers.Risk
The risks associated with a product or service such as reputational or legal risk.Quality
A product that is poor quality as compared to your other products. May damage your brand or have high support costs.Competition
A 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 | ||
Type | ||
Definition | The process of reviewing the products and services of a firm to make a decision to retire, consolidate, maintain or improve each. | |
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