The more the merrier approach

  • Business Premium
  • Monday, 04 Feb 2008

WITH rapid technological change posing ever more intense competitive challenges, companies are often advised to scrutinize their portfolios and eliminate unprofitable products. Every product, the reasoning goes, must stand on its own bottom line. That, however, may be exactly the wrong mantra for these times. A broader portfolio of products - even if some are, for a time, unprofitable - often can help a company capture more value. 

To understand why breadth matters, it helps to look at how today's strategic landscape is changing. New, less-expensive production technologies and ease of entry into some markets have led to a proliferation of products and services; at the same time, the cost of reproducing and distributing certain classes of products has dropped dramatically. The result is a heightening of two core strategic challenges facing businesses: getting noticed and getting paid. 

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