Right. This is related to the observation that, for companies with a big product line, maybe 20% of the products produce 80% of the profit. So cut the losing 80% of the products, right? Margins get better, and the company becomes smaller and more efficient. Profits increase.
A few iterations of this, and you're down to a tiny but profitable product line. Now you're irrelevant to the larger market and someone with a bigger product line can knock you off by under-pricing their alternatives to your few products.
Stellantis, which owns Chrysler, Jeep, Fiat, and a bunch of other minor brands, did this. There is now only one Chrysler product, a mini-van.[1] Profits down. Stellantis cars sitting on dealer lots for more than a year. Angry letter to CEO signed by most dealers.
CEO fired.
A few iterations of this, and you're down to a tiny but profitable product line. Now you're irrelevant to the larger market and someone with a bigger product line can knock you off by under-pricing their alternatives to your few products.
Stellantis, which owns Chrysler, Jeep, Fiat, and a bunch of other minor brands, did this. There is now only one Chrysler product, a mini-van.[1] Profits down. Stellantis cars sitting on dealer lots for more than a year. Angry letter to CEO signed by most dealers. CEO fired.
[1] https://www.chrysler.com/all-vehicles.html