STUDENTS' CORNER - 144

In this session, we will look into the Decline stage of a product and the activities the company of the product in Decline stage must engage itself with.

As 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.

The 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.

If 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.

The 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.

The 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.

But business instinct always directs energy to something that will fetch faster benefit.

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.