Official statement on Sony A-mount future...

Started 11 months ago | Discussions thread
theswede
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Re: Official statement on Sony A-mount future...
In reply to tqlla, 11 months ago

You guys are moving on tangents. Back to the original Question. Why would a company kill a "low profit" line, when that line is making a profit?

They wouldn't.

The example with the store is just one of infinite examples of why you kill of a profitable product.

It is very rare that a profitable product is killed. It happens in software when a new version comes out, but that is because margin cost in software is zero. In material goods it costs a lot to dismantle existing production and logistics, so it's usually not done.

It all boils down to, if you can make more money by moving your resources elsewhere... then you do it.

The problem is; how do you know you can make more money by moving your resources? You have a ramp down and dismantling cost on existing infrastructure, production, inventory and logistics which has to be recouped. You have a ramp up cost of building up production, inventory and logistics for the new product. That also has to be recouped. And if you're moving from high margin (like A mount) to low margin (like E mount) you will have to be assured of a LOT of volume to even get back to zero.

It's just not as simple as you make it out. Products are not just sales numbers and profit (and it's rather asinine to try to maintain that A mount is low profit) but a whole dependency chain. "Make more money" is nebulous; a profitable product is real money in the hand now.

Jesper

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