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Incremental Concept

This concept involves the decision of managers and the course of action emphasizing the changes in cost and revenue due to the influence of the products and prices in the market.


  1. The concept cannot be generalized: The incremental concept is widely used in every business enterprise whose management has profit in mind however its success cannot be generalized because this concept is dependent on decisions made by the management. The decisions are usually applied due to the behavior of the business enterprise and how things are done. This factor varies from one business firm to the other although both implement the concept to try to improve their production. The variations are also applicable depending on the type of products each business firm deals with for instance a business enterprise that deals with perishable goods will base its decision based on the urgency while the one dealing machinery will base its decisions on the market demand for the products hence difference on the application of the incremental concept.
  2. The concept is only applicable for short period: The concept is usually used to evaluate the state of the business firm towards the fixing its state in the market. Once the problem hindering the competitiveness or the production of the business firm is identified through incremental analysis, a decision is usually reached at on various models and ways used before to boost production and increase the quantity of products due to the market. This, therefore, makes this concept only applicable when the market problems arise that hinder product demand and company's competitiveness but once the problem is solved, the concept is always irrelevant to any business.
  3. Applied only when there is excess capacity: The business enterprise competitiveness and ability to meet the demand of the consumers in the market make its probability for the capacity of production higher than the others. This factor brings about the practicability of the incremental concept in the management and business operation to meet the market needs, but in the case of limited capacity, the application of the concept will be irrelevant because the scope of the firm and its products is not broad as well as the market size.