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product life cycle

Page history last edited by PBworks 13 years, 11 months ago




product life cycle




Product life cycle

The product life cycle goes through many phases and involves many professional disciplines and requires many skills, tools and processes. Product life cycle (PLC) has to do with the life of a product in the market with respect to business/commercial costs and sales measures; whereas Product Lifecycle Management (PLM) has more to do with managing descriptions and properties of a product through its development and useful life, mainly from a business/engineering point of view.

  1. Market introduction stage
    • cost high
    • sales volume low
    • no/little competition - competitive manufacturers watch for acceptance/segment growth losses
    • demand has to be created
    • customers have to be prompted to try the product
  2. Growth stage
    • costs reduced due to economies of scale
    • sales volume increases significantly
    • profitability
    • public awareness
    • competition begins to increase with a few new players in establishing market
    • prices to maximize market share
  3. Mature stage
    • Costs are very low as you are well established in market & no need for publicity.
    • sales volume peaks
    • increase in competitive offerings
    • prices tend to drop due to the proliferation of competing products
    • brand differentiation, feature diversification, as each player seeks to differentiate from competition with "how much product" is offered
    • Industrial profits go down
  4. Decline or Stability stage
    • costs become counter-optimal
    • sales volume decline or stabilize
    • prices, profitability diminish
    • profit becomes more a challenge of production/distribution efficiency than increased sales


Interesting Idea: using the community of customers to sustain a brand in the "decline" phase:     "I also wonder if maybe customers can sometimes have more of a company's DNA than the company itself. Apple loyalists (mostly designers and media types) supported the brand with innovative uses and products when Cupertino management ran out of ideas in the 1990's. Harley riders did the same for Harley Davidson. As a business, could I create a distributed DNA with my customers, based on collaborative innovation?"  source






How about Google? Google is doing all the things Microsoft once did (namely moving into adjacent markets like Docs etc..). So, a few years down the line, do you think we would recognize Google, the search company.


So, here is my theory. Speaking of DNA, consider the life cycle of companies. No matter how good they are, they have a life span. If companies like IBM or GE "reinvent" themselves once every 30 years, they are "re-incarnating" themselves (they are no longer same business model, same customer base and same value proposition).




See also





















































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