Product life cycle: 5 strategies for each stage
Posted: Thu Dec 05, 2024 8:54 am
The life cycle of a product refers to the path taken by a good in the market, from its development to its decline.
Understanding product life cycle theory allows you to make better strategic decisions at each step, avoid obsolescence ahead of schedule, and secure your competitive advantage .
And this is essential to maintain your market share , since since 2020 each company has gained 4 competitors in addition to those it already had.
The life cycle of a product refers to the stages that an item goes through during its period of existence on the market. Its objective is to guide the commercial strategy of any
vietnam email address company, regardless of its size or segment.
There are five stages of a product life cycle : development, introduction, growth, maturity, and decline. Often represented as a curve on a Cartesian diagram , it reveals sales expectations (on the vertical axis) over time in years (on the horizontal axis):
(Source: Exploit the Product Life Cycle , in Harvard Business Review)
This model is based on the theory of Theodore Levitt , a German economist based in the United States. In an article published in 1965 in the Harvard Business Review , he proposed that the life cycle of a successful product is marked by its passage through certain recognizable stages .
In his explanation, the academic lists only four steps, with the “introduction” step being added later by other specialists.
You may be interested in reading: What is a product portfolio strategy?
What does product life cycle theory say?
According to Levitt's post in Harvard Business Review, it is possible to discover some assumptions, characteristics and benefits of designing a product's life cycle. From all this valuable content, we highlight two relevant points:
That you can anticipate strategic actions
Product life cycle theory, as written by Levitt, suggests that knowing that items tend to follow a certain behavior in the marketplace helps leaders anticipate the actions needed to maximize their useful life.
That you can anticipate possibilities of success and failure
In his theory, Levitt states that the length of a product's life cycle depends on:
According to this product life cycle theory, the more unique or distinctive the novelty of the item, the longer it will generally take for it to successfully take off.
In other words, designing your product lifecycle allows you to realistically visualize and predict what your chances of success and failure are — and how long it will take for each to happen.
Read also: 10 tips to promote a new or existing product online .
What are the stages of a product life cycle?
As we mentioned earlier, a product life cycle can be divided into five stages : development, introduction, growth, maturity and decline. Below you will find a description of each one, with its characteristics and challenges .
1. Product development stage
Among the stages of a product life cycle, development refers to the time when a new product is first brought to market, before there is proven demand for it and/or before it has been fully delivered technically in all respects.
According to Levitt's product life cycle analysis, this is the stage where sales are low and progress slowly.
It is a common scenario in startups, emerging companies that tend to bet on scalable, disruptive and repeatable business models or products. However, they struggle to make their ideas become a profitable reality at the initial stage.
Understanding product life cycle theory allows you to make better strategic decisions at each step, avoid obsolescence ahead of schedule, and secure your competitive advantage .
And this is essential to maintain your market share , since since 2020 each company has gained 4 competitors in addition to those it already had.
The life cycle of a product refers to the stages that an item goes through during its period of existence on the market. Its objective is to guide the commercial strategy of any
vietnam email address company, regardless of its size or segment.
There are five stages of a product life cycle : development, introduction, growth, maturity, and decline. Often represented as a curve on a Cartesian diagram , it reveals sales expectations (on the vertical axis) over time in years (on the horizontal axis):
(Source: Exploit the Product Life Cycle , in Harvard Business Review)
This model is based on the theory of Theodore Levitt , a German economist based in the United States. In an article published in 1965 in the Harvard Business Review , he proposed that the life cycle of a successful product is marked by its passage through certain recognizable stages .
In his explanation, the academic lists only four steps, with the “introduction” step being added later by other specialists.
You may be interested in reading: What is a product portfolio strategy?
What does product life cycle theory say?
According to Levitt's post in Harvard Business Review, it is possible to discover some assumptions, characteristics and benefits of designing a product's life cycle. From all this valuable content, we highlight two relevant points:
That you can anticipate strategic actions
Product life cycle theory, as written by Levitt, suggests that knowing that items tend to follow a certain behavior in the marketplace helps leaders anticipate the actions needed to maximize their useful life.
That you can anticipate possibilities of success and failure
In his theory, Levitt states that the length of a product's life cycle depends on:
According to this product life cycle theory, the more unique or distinctive the novelty of the item, the longer it will generally take for it to successfully take off.
In other words, designing your product lifecycle allows you to realistically visualize and predict what your chances of success and failure are — and how long it will take for each to happen.
Read also: 10 tips to promote a new or existing product online .
What are the stages of a product life cycle?
As we mentioned earlier, a product life cycle can be divided into five stages : development, introduction, growth, maturity and decline. Below you will find a description of each one, with its characteristics and challenges .
1. Product development stage
Among the stages of a product life cycle, development refers to the time when a new product is first brought to market, before there is proven demand for it and/or before it has been fully delivered technically in all respects.
According to Levitt's product life cycle analysis, this is the stage where sales are low and progress slowly.
It is a common scenario in startups, emerging companies that tend to bet on scalable, disruptive and repeatable business models or products. However, they struggle to make their ideas become a profitable reality at the initial stage.