Register now or log in to join your professional community.
We start a company with the intention of Producing a product to market the same and establish well to reap the future benefits. If we are able to achieve the capacity utilization in full, still there is everlasting demand for the product, that means it can safely go for expansion and intensify Research and Development to make the product more attractive and less cost effect.i.e.further capital investment is less risky. We know the product, we know the market, we know the market potential, we know our customers, we know how to utilize the channel for distribution, we know the profits and benefits, we know how to compete in the market then what else is the motive behind starting a business that has a great future?
It is bad, because it means you cant met customers demand. in future the company will end up loosing customers that is because they will be tiered of waiting for your products.
It is good in the short term and you can make high margins. Need to be aware of the USP of your product as competition will soon be breathing down your neck unless you innovate and differentiate your product from competition.
I can say that is good for now your product is on demand. But there is a nature of market it always spreads so if you don't have expansion plan then it would be harmful for the company.
