Divide and Conquer: Extending product lines

Divide et Impera - Philip II of Macedon

This strategy led Philip II into the expansion of the kingdom of Macedon, by redesigning his army he was capable of winning more battles and therefore he became the unquestioned master of ancient Greece.

These days some companies rely on this famous quote and conceive a large mix of products, under the thought that having a large product line or the same product in different sizes will gain them presence and will satisfy the needs of even the pickiest customer.

While this statement has some sort of logic this might not be the smartest option for all consumer goods companies, why?

1. Delays on production times - Making different product sizes requires changing machine’s configuration, perform set ups and spending time making adjustments.
2. More warehouse space is needed - All physical products require a space inside the warehouse, consequently it will take more space to store a large selection of products.
3. Product cannibalism - While large products won't eat small products literally, it is possible that customers would stop buying certain size because they find another more convenient.
4. Product Throughput might not be high as expected - It is of vital importance that after having to deal with all changes for creating a new size, the product actually generates profit.

T = S - TVC

(Throughput = Sales - Totally Variable Costs)

I am not a 100% against expanding product lines, but it is a process that requires more than a simple market research, it implies knowing that all participating departments can withstand the work that changing something as simple as size involves.

If any of the previously mentioned arguments cannot be met sometimes companies should stick with one of my favorite quotes "Less is more"