Product Strategy Concept - Product Lines
Concept Summarized by Sam Mishra, MBA (MIT Sloan)

Product lines consist of similar products with cost-feature variations for each product within the product line. Extending a product line horizontally implies adding products to the line with differing features at the same price level. Extending a product line vertically implies differentiating the product offering on price.

From a competitive perspective, an established firm contemplating a product line expansion should ask itself these questions: What are the costs involved in extending an existing product line? Will the product line expansion deter entry of other players?

In general, a broad product line leaves fewer holes to be filled by the competition, compared to a concentrated and narrow product line. In other words, a broad product line deters market entry by a new entrant, because it leaves fewer holes to be filled by a new entrant.

The threat of new entrants in analyzing the competitive dynamics of an industry is depicted pictorally in the Porter's 5 forces framework in our Strategy Portal.




Home - Product Strategy - Strategy Portal - Economy Portal - Terms of Service


©2006 - 2007 Franteractive Inc. All rights reserved.