Final answer:
Determining whether or not to discontinue a product, department, or store is based on profitability, market demand, and strategic fit.
Step-by-step explanation:
Determining whether or not to discontinue a product, department, or store is based on several factors in the business world:
- Profitability: The first consideration is whether the product, department, or store is profitable. This involves analyzing sales data, expenses, and profit margins to determine if it is generating enough revenue to cover costs and contribute to the overall profitability of the business.
- Market demand: The next factor to consider is the demand for the product or service offered by the product, department, or store. This involves studying market trends, consumer preferences, and competition to determine if there is enough customer demand to sustain the business.
- Strategic fit: The decision to discontinue a product, department, or store also depends on its strategic fit with the overall business goals and objectives. If it does not align with the strategic direction of the company, it may be necessary to discontinue it.
These factors are assessed through various methods such as financial analysis, market research, and strategic planning to make an informed decision.