3 ms·
You see this alot in business... its why there are business cycles. The bad thing about "boom" markets is that you easily run the risk of building product the
by lordfrito 3y ago
You see this alot in business... its why there are business cycles.
The bad thing about "boom" markets is that you easily run the risk of building product the market doesn't need. You think it needs it, but it doesn't. So you overbuild without knowing it.
Once the market figures this out, it is usually the same story. Something along the lines of "I don't need any more product, I have enough product on the shelf to last a year" etc.
At this point you can't build anything more until the market recovers and the excess inventory is cleared out. This shuts down plants and is why people get laid off.
The more you overbuild the longer the recovery. We're dealing with the recovery due to overbuilding due to COVID right now.
In the case of 1983, it was a heck of a lot of overbuilding. Atari should be a case study in business school.