PRODUCT DISCONTINUATION OUTLINE

When a product’s sales head into decline, one of the possible strategies
is to discontinue the product and withdraw it from the market. The
product discontinuation process begins with an evaluation that resembles
a Business Case. The Business Case justified the investment for the
product, so the discontinuation case describes the reasons to dis-invest
in the product, or simply, to divest.
The following outline can be used as a method to evaluate the impact
of possible discontinuation on the portfolio. You may need to include
issues that are germane to your business or industry; this is a good place
to start.
1. Executive Summary
2. History and Chronology—describe the business conditions and
market drivers.
3. Business Assumptions—to make sure that all issues are being
addressed.
a. Unit volume assumptions
b. Pricing strategy until the product becomes unorderable
c. Time required to service and support customers
d. Funding required pre- and post discontinuation
e. Asset write-offs to be considered (if any)
f. Legal or contractual issues remaining
g. Customer issues/competitive issues
h. Regulatory notification
i. Operational issues
i. Spare parts or inventory requirements
ii. Required facilities
iii. Plant capacity requirements
iv. Final order dates to be considered
v. Stock liquidation timing
4. Financial Data—including financial history and future prospects
a. Profit and Loss (P&L) projections
5. Project Plans and Schedules
a. Human resources required
b. Tasks involved in the discontinuation
c. Budgets for each function during discontinuation
d. Vendor or partner notifications
e. Customer notifications
f. Internal notifications
6. Risks
7. Recommendations