the very word ‘decline’ clearly indicates, every vital factor begins to come
down, to decline. The company becomes
aware of the straight fact that the sales of the product have considerably
declined. Customers are no more
attracted by the product for various reasons.
Some of the obvious ones are stiffer and stronger competition from the
efficient rivals, price related issues, adoption of advanced technological
developments in the business activities, so on.
indisputable fact is the company now has understood that any more production of
the product and distribution will not bring in even marginal profit; it means
the company will not be wise enough to invest on the product anymore. The company stops spending money on the
product and its promotion since it is slowly but surely marching out of the
market. The product has almost become an obsolete one, not wanted. To put it
differently, sale decline leads to sure death of the product.
the company so desires to take a last stint effort to revive the product if not
to restore its position in the market, there are some measures the company may
choose to take. All these measures can
be looked upon as some kind of guidelines and the company has to stick to some
measure that it feels will bring benefits.
company can stay in the market with the product till its rival companies withdraw
from the competition. But it takes massive financial muscle to stay stiff in
the market. Experts suggest that the
time, the efforts and the money spent on the product in decline to revive can
be better spent on those products that promise more profit.
other initiatives of course relate to price accommodation and different line of
cheaper production with advanced technology.
Or, even change the market where there is no such competition.
business instinct always directs energy to something that will fetch faster
Now, we may recall that we were studying the
obstacles that hamper supply chain putting hurdles in its path to become
strategic fit and we looked into some of them. There are some more which we
will briefly look into in our next session.