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In the lifecycle of any product portfolio, there comes a time when certain products underperform, leaving decision-makers with a difficult question: Should you continue to fund or phase them out? Underperforming product lines can drag down your portfolio's overall performance, siphon resources, and reduce profitability. Yet, there's also the potential that, with the right adjustments, these products could regain their footing. So, how do your product teams make this decision?
Evaluating a Struggling Product Line
Here are five essential questions that can help guide your strategy when evaluating whether to continue funding or move on from a struggling product line.
Question #1: Is the Market Still There?
The first and most important question is whether there's still a viable market for the product. Market demand is the foundation for any product's success. If demand is dwindling, it may not make sense to continue investing. However, it's essential to dig deeper—has demand fallen due to changing customer preferences, economic factors, or new competitive products? Or is the demand there, but your product has lost its relevance?
Product managers need to conduct a thorough market analysis to answer this question. They can look at market size, trends, and potential growth. If the market for the product is shrinking, they'll need to determine whether it's likely to recover or continue declining. Is the product addressing a niche that no longer exists, or has the competition simply outpaced them in meeting customer needs?
The Key Consideration: If there's still significant demand, there may be an opportunity to reposition or refine the product to meet current needs more effectively.
Question #2: Is the Product Aligned with Future Trends?
It's critical to evaluate what type of future the product has beyond the present market conditions. Consumer preferences, technology, and industry trends evolve. If the product doesn't align with these changes, it may be destined for obsolescence.
For instance, if your product is rooted in outdated technology or doesn't meet new sustainability standards, continuing to fund it could throw money at an increasingly irrelevant offering. However, a product may have untapped potential to adapt to future trends, such as digitization, automation, or eco-friendliness. If this is the case, it might be worth pursuing further investment.
Conducting a future-trend analysis can help determine whether the product can stay relevant or will become obsolete. Ask your teams whether the product can be updated or enhanced to better align with these trends. If it can, you may be able to breathe new life into the product.
The Key Consideration: Future-proofing a product means ensuring it stays relevant. Continued investment could be worthwhile if adjustments or new features can align the product with upcoming trends.
Question #3: What Are the Operational Costs of Maintaining the Product?
The operational cost is one of the most overlooked aspects when evaluating whether to continue funding a product. A product that is struggling financially may not justify its high operational costs. When considering whether to pull the plug, you need to assess the costs of manufacturing, marketing, distribution, and servicing the product.
Consider the cost-benefit ratio by determining whether the profits (or potential profits) outweigh the costs. If not, can you cut down operational expenses without sacrificing quality or performance? Streamlining operations, automating processes, or renegotiating supplier contracts are all potential ways to reduce costs and make the product more viable.
It's also essential to evaluate whether these costs are likely to rise. If material costs or production expenses are projected to increase, you'll need to weigh whether the product will become increasingly costly to maintain.
The Key Consideration: A product that costs too much to produce or service may not be worth the financial strain. However, operational improvements could lower costs and justify keeping it in the lineup.
Question #4: Can the Product Be Revitalized with Adjustments?
Not every struggling product is beyond saving. Sometimes, even small adjustments can revitalize a product, returning it to profitability. The key is identifying whether your product can be enhanced or re-engineered to better meet market demands.
This could involve anything from minor tweaks to major overhauls. Product leaders can discuss with their teams whether they can improve product features, functionality, or design to make them more competitive. For example, would introducing new versions or models (such as a premium or budget-friendly option) attract a broader audience?
Revitalizing a product can take many forms, such as improving its value proposition, changing its design, or offering more flexible pricing strategies. However, product teams must be sure these adjustments are backed by solid research and align with customer needs. A failing product won't magically turn around unless you're solving a real problem for your audience.
The Key Consideration: Before abandoning a product, consider whether there are opportunities to refine, rebrand, or repackage it to fit market demands better.
Question #5: How Does the Product Fit with Your Overall Portfolio Strategy?
Your product portfolio should work together cohesively, with each product serving a role in your company's broader strategic goals. Therefore, it's essential to ask how your struggling product fits into this bigger picture. Does it complement other offerings, help build customer loyalty, or create cross-selling opportunities? Or is it an outlier that no longer aligns with your business objectives?
A product that doesn't fit within the larger strategy can drag down your entire portfolio, while a well-aligned product can strengthen your overall market position. Product teams can evaluate whether continuing to support the product adds value to the brand, even if it's underperforming in sales. Sometimes, products that aren't profitable in isolation can still drive long-term success by supporting other offerings or building customer trust.
The Key Consideration: Assess whether the product aligns with your long-term business strategy. If it no longer fits, it might be time to discontinue it and focus on more promising opportunities.
Define Your Product Lines Using Gocious Software
When it comes to making informed decisions about struggling product lines, having the right tools is essential. Gocious software offers a comprehensive platform to evaluate your product portfolio holistically. Our dashboards allow you to visualize market demand, track alignment with future trends, and analyze the operational costs of maintaining each product. Gocious also helps you assess how each product fits within your overall strategy, making it easier to determine which products to fund and which to sunset.
By providing real-time data and actionable insights, Gocious enables you to make data-driven decisions on product lifecycles, ensuring that your portfolio remains competitive and strategically aligned with market demands. Our roadmapping software can also help identify revitalization opportunities by tracking customer feedback and market trends, giving you the tools to re-engineer or enhance a struggling product effectively.
Manage Struggling Product Lines with Confidence and Clarity with Gocious Product Roadmap Software
Deciding the fate of a struggling product line is never easy. However, your product teams can make informed decisions by asking the right questions—about market demand, future trends, operational costs, potential adjustments, and portfolio alignment. Whether the answer is to reinvest, re-engineer, or retire the product, a data-driven approach ensures that you're positioning your company for long-term success.
With tools like Gocious product roadmap software, you can navigate these complex decisions with greater confidence and clarity, ensuring that your product lines are both relevant and profitable. Schedule your free demo of our product roadmaping platform today.