Industry Data & Market Research

Strategic Planning with the Product Lifecycle (Industry Lifecycle) Framework

Product Lifecycle (Industry Lifecycle) is a technique that enables better strategic planning in business.

The product lifecycle (also useful in evaluating industries) consists of four stages:

Strategic Planning Product Life Cycle Market introduction stage

  • Costs are high
  • Slow sales volumes to start
  • Little or no competition - competitive manufacturers watch for acceptance/segment growth losses
  • Demand has to be created
  • Customers have to be prompted to try the product
  • Makes no money at this stage

Growth Stage

  • Costs reduced due to economies of scale
  • Sales volume increases significantly
  • Profitability begins to rise
  • Public awareness increases
  • Competition begins to increase with a few new players in establishing market
  • Increased competition leads to price decreases

Mature Stage

  • Costs are lowered as a result of production volumes increasing and experience curve effects
  • Sales volume peaks and market saturation is reached
  • Increase in competitors entering the market
  • Prices tend to drop due to the proliferation of competing products
  • Brand differentiation and feature diversification is emphasized to maintain or increase market share
  • Industrial profits go down

Saturation and Decline 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

Other Strategic Planning Frameworks

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