Dependence on Rebates

This example of an Addiction structure serves to point out how the apparent right answer can be doubly incorrect.

We begin with an organization that is facing declining sales. This decline is very apparent and warrants immediate action. As a solution the organization implements a rebate program to boost sales, which it in fact does increase sales. When declining sales have been stemmed the rebate program is terminated and it is considered that there is no action warranted in the area of product enhancement.

After some period of time the declining sales problem reappears. Now, since a rebate program solved the problems last time, it is jumped on as the obvious answer. Because the rebate program worked last time it is figured that it will work this time, so there is still no need to consider product enhancement.

As it turns out the organization is developing a dependency on rebates as the standard answer to a declining sales situation. Yet, each time it takes a little bit more of a rebate and it has to be in effect a little longer to stem declining sales. The situation will eventually reach a point where a rebate program will no longer resolve the situation. At that time it may be too late to approach the situation from a product enhancement perspective.

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