How does an organization’s product mix relate to its development of a product line? When should an enterprise add depth to its product lines rather than width to its product mix?

An organization's product mix refers to the combination of products it offers to its customers. This mix can encompass various product lines, each comprising a group of related products.

• Product Mix and Product Line Development: The product mix includes all the products or lines a company offers, while a product line refers to a group of related products marketed under a single brand. An organization's product mix is essentially the sum of its various product lines. For instance, a company that manufactures electronics might have different product lines for smartphones, tablets and laptops, each representing a distinct set of products.
• Adding Depth vs. Width:
• Depth: Adding depth to a product line means introducing variations or additional versions within a specific product line. For instance, adding new colors, sizes, features or models to an existing line of smartphones.
• Width: Increasing width in the product mix involves adding entirely new product lines unrelated to the existing ones. For instance, a company manufacturing electronics might decide to expand into furniture or clothing.

When to Add Depth vs. Width:

• Adding Depth: Customer Preferences: When there's a clear demand or identified customer preference for variations within an existing product line.
• Market Competition: To remain competitive by offering a wider range of choices and staying up-to-date with market trends.
• Enhanced Customer Experience: To cater to specific needs or preferences of different customer segments within an established product line.
• Adding Width: Market Diversification: When seeking growth opportunities in new markets or industries not currently served by the organization.
• Reducing Risk: To reduce reliance on a single product or market, spreading the risk across multiple product lines.
• Capitalizing on Expertise: Expanding into areas where the company's expertise or resources can be leveraged effectively.

In essence, adding depth to a product line is often a strategic move when there's a demand for variations or improvements within an existing line, while adding width to the product mix is strategic for diversification, market expansion or risk reduction purposes. Each decision should align with the company's overall strategic goals and market positioning.