A capacity-lagging strategy is a conservative approach to capacity planning that involves adding capacity only when the firm is operating at full capacity because of an increase in demand1. This strategy can help minimize costs and reduce the risk of excess capacity, but it can also lead to a disadvantage of not being able to fully meet customer demand if it rises quickly2. This can result in lost customers, revenue, and market share, as well as lower customer satisfaction and loyalty3. References:
*Lag Capacity Strategy, Lag Demand Strategy - UniversalTeacher.com
*Capacity Planning Strategies: Types, Examples, Pros And Cons - Toggl
*3 types of capacity planning strategies (with examples) - Xola