Product proliferation is bad for business
Whale Curve: 20%-30% of products typically generate 300% of a company’s profits
After years of line extensions, unfocused product and service expansion, and poor product lifecycle management practices, businesses are drowning in too many products and services. The result: inflated costs, high levels of working capital, poor execution, and lack of focus. Customers suffer too—they’re on the receiving end of poor service levels and left to navigate an overwhelming portfolio. Many give up and go elsewhere. Getting your portfolio right is as much about keeping and growing your customers as it is about becoming a more profitable business.
We typically see 20%-35% of a company’s products or services generate 300% of profitability, while the rest are a drag on the business, shown on the so-called 'Whale Curve'. It is not surprising that portfolio optimization is at the top of many companies’ to-do lists.