Walmart Article
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Summary
Walmart article strengthens the authors point of view in the first 3 chapters. Walmarts lesson from discontinuing low performing products is that it is detrimental to make product decisions by just looking at the product profitability alone. One should also consider the product assortments or complementary products before discarding a product as unprofitable. The customer who comes to the store for that specific product spends his total shopping/grocery budget at that store. So when the product is discontinued, the customer not only shopped for the discontinued product in a different shop but also spent his whole grocery budget there. The articles and the textbook reading seemed one-sided. While keeping some unprofitable products might make sense because of the revenue generated from the customer buying other products more than compensates the loss from the unprofitable product, clearly there should be some products which should be discontinued. The text fails to specify what factors other than revenue generated from same customer or other complementary products should be considered. What are the situations when discontinuing a product is justified? How does a company rationalize/optimize its product line?
Walmart article strengthens the authors point of view in the first 3 chapters. Walmarts lesson from discontinuing low performing products is that it is detrimental to make product decisions by just looking at the product profitability alone. One should also consider the product assortments or complementary products before discarding a product as unprofitable. The customer who comes to the store for that specific product spends his total shopping/grocery budget at that store. So when the product is discontinued, the customer not only shopped for the discontinued product in a different shop but also spent his whole grocery budget there. The articles and the textbook reading seemed one-sided. While keeping some unprofitable products might make sense because of the revenue generated from the customer buying other products more than compensates the loss from the unprofitable product, clearly there should be some products which should be discontinued. The text fails to specify what factors other than revenue generated from same customer or other complementary products should be considered. What are the situations when discontinuing a product is justified? How does a company rationalize/optimize its product line?