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  • Commerce Capability Maturity Model^SM
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Strategic Concepts

• Commerce Capability Maturity Model^SM
• Adding Value to B2B Commerce
• Commerce Improvement Cycle^SM

What is the difference between Product Rationalization and Product Differentiation?

Product Rationalization is a technique for managing the breadth of a product offering by reducing or eliminating some of the variability or complexity in features and options. This is a valuable exercise when performed as part of an overall product lifecycle management strategy.

However, quite often companies will misunderstand rationalization and implement a product standardization program. In an effort to reduce costs, they identify a subset of the currently offered products that seems to meet a high percentage of market demand, and then proceed to standardize the sales, engineering, and manufacturing processes around those items. This scheme may reduce costs in the short term, but variability has a way of always creeping back in to the product offering because of customer demands and competitive pressures.

Product Differentiation is a technique for meeting these ever changing market demands while still reducing cost, error, and delay.