The term ‘Strategy Tax’ relates to the loss due to the release of an inferior product or a product released with lesser features on purpose so that it does not compete with a company’s own products. The product release may also ignore user demand or feedback. The company can also have so many strategies to manage that consequently its products suffer. For example, Microsoft failed to capitalize on building a browser-based editor earlier because the company managers thought that it would affect sales of its other product ‘Microsoft Word’.
In addition, when releasing a new product a company might want to leverage its existing business and user base. This can prove a smart move or may backfire in some cases. For example, Google’s move to integrate its new product Buzz into Gmail did not work.