Product portfolio strategy
A major strategic question for companies is: “Do we have the right portfolio of products (and services) for the future?”. Aspects are:
– can products be improved?
– have services to be added?
– can the customer needs be fulfilled in a fundamental other (= better) way?
– is it a viable business (market) for the future?
Products with a high level of eco-costs (in comparison with their value) have the problem that their costs might increase sharply in the future, caused by measures taken by governments. The “external” eco-burden of products are “internalised” (= become part of the internal cost structure of that product) by “tradable emission rights”, obligatory introduction of “best available technologies” and eco-tax. It is not a question if but when. The costs of a product might even rise above the level of its value to customers: then there is
no market for that product. So it makes sense to take action in advance. See Fig. 4.5a.
Note: This effect of internalising of eco-costs might be a thread to a company, but it might also be a challenge. When my product has less eco-burden than that of my competitor, my product can withstand stricter regulations of the government. So this characteristic of low eco-costs of my product is a competitive edge.