Question

Your firm has a new strategy that will make its established product obsolete. However, it will take a year before you are ready to implement the new strategy. If you announce your plan in advance, profits will disappear because many customers and intermediaries will delay purchases until the new product is released. If you don’t announce the new plan, customers and intermediaries will continue to buy the establish product as their needs dictate, and some will be stuck owning the old product and may not do business with you again.

Answer 1

Answer:

The transition between launching a new product or strategy and discontinuing the current product is a crucial business decision because it involves financial risk, customer relation and overall brand of the organization.

Step-by-step explanation:

I would choose to announce the new business strategy with a risk of short-term financial loss because of the following reasons:-

Competitive Business Environment:- In a competitive world, an organization must update the current line of products or introduce a new one to meet the growing demand and expectations of its customers. Even though a new strategy or product may incur additional cost or a loss, product development is key to having an edge over its competitors.

 Long-Term Goal:- Organizations that develop strategies keeping the long-term vision of the company in mind tend to survive and sustain profits in the long run. Business is an on-going process so it’s important to stay relevant to customer demands in the future as well. Loyal customers always expect the company to deliver new products and services which can outperform the existing products and creates brand loyalty.

Business Integrity:- An organization must exercise effective stakeholder’s relationship management not just with customers but with other stakeholders like suppliers and shareholders. Announcing a new business strategy in advance built trusts and opportunities for your stakeholders to engage with you in a B2B partnership in future. This strengthens the existing partnerships and relations, where others would want to continue doing business with you in future and beyond.