Product life cycle is a continual point of focus for companies in their strategic planning. As new products emerge and existing products continue to exist, companies need to assess the stages of the product life cycle and determine the necessary steps to keep the product growing and generating revenue. Eventually, every product will pass through all stages of the product life cycle and cease to exist in the current form.
The product life cycle consists of four phases: introduction phase, growth phase, maturity phase, and decline phase. The introduction and growth phases are exciting stages for the product and company. Interest is generating in the product, sales are growing, and revenues are strong. In the maturity phase, growth is stagnating and sales are leveling off or declining, and competing companies may be offering a similar product. Finally, the decline phase will be reached once sales have severely declined.
Companies invest a large amount of time, money, and resources into the development and launching of a product and often have a variety of products in different stages of the life cycle.
A single product can also be in various stages in the product life cycle in the various markets. A primary goal is to keep a product in the market with solid sales and performance. However, all products will reach the maturity phase. At this point, a company must rethink its strategy and determine how to prevent the product from reaching the decline phase.
The Sanyo Electric Co., Ltd of Japan is one company that offers many different types of products. They manufacture "a broad range of electronic products grouped into six categories: AV/Information and Communications Equipment, Home Appliances, Industrial and Commercial Equipment, Electronic Devices, and Batteries as well as others." (Sanyo, 2008). Within the home appliances category are refrigerators. While...