Question

Discuss the qualitative factors in Keep or Drop Decision in details.

please, no repeated answers that have been already given on this wibesite.

Answer 1

I don't know what are the answers already given hence pardon me if I have similar points in my answer

Answer)

Qualitative factors that have Keep or Drop Decision are

1)Employees Morale is one of the key factors that are to be considered as we in general drop some product if they are unable generate the revenue estimated without which we may not be pay employees salaries timely with no increments from long time.Hence,we need to consider employees morale that whether they are willing to work for that product or not.

2) Customer interests is another factor that we have to consider as dropping one product may have adverse effect on another product like dropping mobile phone may decrease the demand for its accessories.

3)Market conditions are another factor that must be considered as we can see there may be a decline in demand for one product from any brand due to some reasons may have negative impact.For example,with the introduction of mobile phones the demand for pagers have drastically dropped to zero and in such situations there won't be any use of Keeping the product as it declines our funds available but gain no revenue.

4) Opportunity costs i.e with the funds used to produce such product we may use such funds and produce better returns.

5)Financial analysis i.e Although we strive our best to improve our but see no reasonable profits than it is better to drop the product.Example,Chevrolet dropped its car sale in India after no profits found for years although reasonable efforts are taken to improve sales.