Good News Private Limited is a publishing company and it has been publishing 2 daily newspapers, 2 weekly and 5 monthly magazines. In view of rapid technological development, the company promoter is worried about the lon

Obsolescence risk is the risk that a process, product, or technology used or produced by a company for profit will become obsolete, and thus no longer competitive in the marketplace. If something is 'obsolete' it means it is out of date, i.e., we no longer use it. Obsolescence risk relates to a company's loss of competitiveness in the market. The company loses competitiveness because it has something that has gone out of date. Lack of competitiveness harms profits. Obsolescence risk is most significant for technology-based companies or companies with products or services based on technological advantages. Obsolescence risk is a factor for all companies to some degree and is a necessary side effect of a thriving and innovative economy. This risk comes into play, for example, when a company is deciding how much to invest in new technology. Will this technology remain superior long enough for the investment to pay off? Or will it become obsolete so soon that the company loses money? Obsolescence risk also means that companies wanting to remain competitive and profitable need to be prepared to make large capital expenditures any time a major product, service, or factor of production becomes obsolete. In the rapid changing world Obsolescence risk is fast emerging and unless the companies are able to cope up with this timely, the impact will be quite heavy and may lead to closure of the units also. Nokia is the latest example on this. In case of Good News Company Private Limited, the company has been facing Obsolescence Risk. As computers, tablets, and smartphones have become more popular and affordable, more consumers have started reading magazines, newspapers, and books on these devices instead of in their print forms. For the publishing company to remain competitive, it must minimize its investments in the old paper publications and maximize its investments in new technologies. Even as it makes this shift, it must remain alert to new and unimagined technologies that could supplant the currently popular ways of reading and require still more investment.