Product portfolio rationalization forces you to obsolete unprofitable products
As a product manager, the ultimate goal is to develop and launch new products into the market. At times though, it is more critical to decide which products to stop selling. The reasons for eliminating a product are numerous; a competitor offers something better, the product is unprofitable, the product is aging or hard to build, it takes resources that are best spent elsewhere, it no longer aligns with corporate goals, or it competes with a new product ready to launch.
Eliminating a product from a portfolio can be an emotional decision for members of the organization. Engineers who developed the product don’t want to see it go, business managers don’t want to give up the revenue, and sales people don’t want to leave their customers hanging without a solution, or worst case – go to a competitor.
If a product is removed from a portfolio with care, it offers benefits to the organization and may offer customers better options in the long run. In many cases, customers are more than ready to migrate to the next version of the product. Also, losses to a competitor are often less than predicted.
The key to success is communication. It’s nice to be able to offer customers the options of a last time purchase. It’s also important for other product managers to know what is going on, so they can time their launches with the end of life of other products. Production needs to know how many spare parts to stock and finally, sales and customer service needs to have a consistent positive message for customers.
Product managers need to know how to balance both the creative side of new product launches, and the product portfolio rationalization side of the equation to be successful. For every product eliminated, there is an opportunity to sell something better.