1 What reasons for and against product proliferations might different functions use? Companies want to grow, and one of their commonest strategies is to create new products.

These may increase revenues, but of course they do not guarantee profits. In fact, product proliferation often reduces margins. One company we studied found that the bottom 40 per cent of its products generated less than 3 per cent of revenue, and the bottom 25 per cent of its products were highly unprofitable.

Several years ago, Clorox, a $4 billion consumer products company, realised it needed to address the problem of underperforming products. At the time, 30 per cent of the company’s stock keeping units (skus) were falling short of sales volume and profit targets. Clorox responded by developing a formal process for evaluating sku performance and making decisions about which products to cut.