When Does Your Product Need to Die?

Last Updated Aug 20, 2009 3:29 PM EDT

Business people conduct their own "death panels" everyday by asking, "Is this product past its prime? Should this service be diminished? What's in R&D that can re-eenergize our sagging sales?"

But as a recent NYT article written by Harvard Business School professor Mary Tripsas points out, companies may be wise to figure out how to keep older products on life support rather than ushering them to a premature death.

"Companies can proactively manage the innovation endgame. Continuing improvements to extend the life of technology, particularly given the attractive margins on the old, can be a wise business decision -- and not necessarily a reflection of narrow-mindedness."
One way to do this, says her HBS colleague Daniel Snow, is to take parts of new technologies under development in R&D and use it to extend the life of something old. The carburetor was given an extended run by incorporating technology from electronic fuel-injection. Read Snow's working paper on the subject, Capturing Benefits from Tomorrow's Technology in Today's Products: The Effect of Absorptive Capacity
Tripsas says customers move at different speeds, "so investments should be focused on market segments that most value the old."

Her examples of old technology made fresh include hybrid cars, which car makers are using to bridge traditional autos and next-gen alternative fuel vehicles.

The pitfall to avoid is hanging in so long with an aging product that a competitor bites you from below with a better but cheaper offering.

Aging Gracefully

Another thought about the old. Some entrepreneurs look for opportunities to acquire brands that have been retired by their owners. In this way investors have been able to purchase and revitalize such once well-known brands as Prell shampoo, Fabergé cosmetics and Comet cleanser. Many people grew up with these names and remember them fondly. The key is making them relevant again to today's consumer.

  • Sean Silverthorne

    Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

    Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.