Product management glosary

Product Consolidation

What is Product Consolidation?

Product consolidation is a strategic process in product management that involves combining, merging, or eliminating multiple products within a company's portfolio to streamline operations, reduce costs, and improve overall efficiency. This process is often undertaken when a company has a large number of products, some of which may be underperforming or have overlapping functionalities. By consolidating these products, a company can focus its resources on a smaller number of high-performing products, ultimately leading to increased profitability and customer satisfaction.

Reasons for Product Consolidation

There are several reasons why a company might choose to consolidate its product offerings, including:

  • Cost reduction: By eliminating underperforming or redundant products, a company can reduce the costs associated with manufacturing, marketing, and supporting these products.
  • Improved focus: With fewer products to manage, a company can devote more resources to the development, marketing, and support of its remaining products, leading to better overall performance.
  • Increased customer satisfaction: By streamlining its product offerings, a company can ensure that its customers have a clear understanding of the products available and their respective benefits, leading to increased customer satisfaction and loyalty.
  • Competitive advantage: A company with a focused product portfolio can more effectively compete against other companies in its industry, as it can devote more resources to the development and marketing of its core products.

Steps in the Product Consolidation Process

Product consolidation typically involves the following steps:

  1. Product portfolio analysis: The first step in the consolidation process is to conduct a thorough analysis of the company's existing product portfolio. This involves evaluating the performance of each product, identifying any overlapping functionalities, and determining which products are underperforming or no longer align with the company's strategic goals.
  2. Decision-making: Based on the results of the portfolio analysis, the company's leadership team must decide which products to consolidate, merge, or eliminate. This decision should be based on factors such as the potential cost savings, the impact on customer satisfaction, and the company's overall strategic goals.
  3. Implementation: Once the decision has been made, the company must implement the consolidation plan. This may involve merging the development teams for the affected products, reallocating marketing resources, and updating the company's sales and support processes to reflect the new product lineup.
  4. Monitoring and evaluation: After the consolidation process has been completed, the company should monitor the performance of its remaining products and evaluate the overall success of the consolidation effort. This may involve tracking key performance indicators (KPIs) such as sales, customer satisfaction, and market share, as well as conducting regular reviews of the company's product portfolio to ensure that it remains aligned with its strategic goals.

Challenges and Risks of Product Consolidation

While product consolidation can offer significant benefits, it also comes with some challenges and risks, including:

  • Resistance to change: Employees who have been working on a product that is being consolidated or eliminated may be resistant to the change, leading to decreased morale and productivity.
  • Loss of customer trust: Customers who have been using a product that is being discontinued may feel frustrated or betrayed, leading to a loss of trust in the company and potential damage to the company's reputation.
  • Integration challenges: Merging the development teams and processes for multiple products can be a complex and time-consuming process, with the potential for delays and other issues.

In order to minimize these risks, it is important for companies to carefully plan and execute their product consolidation efforts, ensuring that they communicate effectively with both employees and customers throughout the process.


Product consolidation is a valuable strategy for companies looking to streamline their operations, reduce costs, and improve the overall performance of their product portfolio. By carefully analyzing their existing products, making informed decisions about which products to consolidate or eliminate, and effectively implementing the consolidation plan, companies can achieve significant benefits and maintain a competitive edge in their industry.