Trade off Examples

• Product

  • Choosing to spend money upgrading an existing product may result in the loss of the next best alternative 
• Market research

  • Foregoing market research may help the business to get its product to market quicker, however, the trade off is that the product may not have the features/qualities desired by the market
• Business ownership

  • Choosing to operate as a partnership will mean that a business loses the benefits of operating as a private limited company (Ltd) 
• Promotional methods

  • Businesses have a limited amount of money to spend on promoting their products. Choosing to sponsor an elite athlete means that the business may have to give up other forms of promotion, such as radio advertising
• Pricing strategy

  • If a business decides to use a competitive pricing strategy it loses the opportunity to price skim
• one thing has to be reduced or given up in order to increase or gain another this is called trade off