What is a disadvantage of product/service grouping?

• A. Duplication of resources can occur
• B. It reduces time to market
• C. There is usually improved coordination
• D. It guarantees consistent branding across groups

Answer: (A)

Organizing by product lines tends to cause duplication of resources. When each product unit has its own marketing, sales, R&D, IT, and support functions, the company ends up paying for similar capabilities multiple times, which raises overhead and reduces overall efficiency. This is the clear downside of product/service grouping. While dedicated teams can improve focus on a specific product, that same structure makes shared services appear twice or more, unlike other structures where resources are centralized to reap economies of scale. Time to market can vary and isn’t inherently a disadvantage of this setup, and coordination or branding benefits aren’t guaranteed and can even suffer across multiple product units.