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In TYPICAL business model, I would expect to make profits as long as you can until it's no longer profitable, as opposed to get a jump on it. "In the future, we won't make profits so we are stopping now"..?? Does anyone buy that? "
Hello basement,
I buy it and agree with prpixel and jag.
For a business, there are numerous factors, and permutations of factors, that need to be considered prior to making a decision as critical as ceasing production and exiting the market.
It's never as simple as just making profits as long as you can until it's no longer profitable. A well run business is more concerned with past, current and future projections of sales, costs and profit margins. The current and projected profit margin (sales price less costs usually measured as a % of sales price) and sales volume are the determining factors when deciding whether they are going to continue making a specific product, not just whether they are going to make a profit.
A large company like Oppo needs to constantly evaluate their return on investments to ensure they're allocating their assets wisely, optimizing profits and taking advantage of opportunities that may exist in manufacturing alternative products. Satisfying the wants or needs of a relatively small niche market is of much lesser import.
It's Capitalism at work but it does create a vacuum in the market that may be filled by another company (Cambridge?) that views is as an opportunity if the numbers make sense..
Tim
