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The product lifecycle approach helps companies make decisions based on industry knowledge and strategies, with products viewed through four stages. Benefits include better decision-making, planning for the future, and the ability to control a product’s trajectory. Analyzing competitors’ decisions can lead to implementing strategies to extend a product’s profitability, and the approach can also aid in people management and accountability.
The product lifecycle paradigm helps companies make decisions based on a shared repository of industry knowledge and strategies. By structuring the product development process, it can be analyzed over time to identify patterns. The results of business decisions made during lifecycle stages can be quantified and compared with the decisions made by competitors.
The benefits of the product lifecycle structure are numerous. Under this approach, products are viewed through four stages: introduction, growth, maturity and decline. By breaking product development into four components, decisions made to impact each component are more easily tracked and evaluated. Because the product lifecycle approach is a standard methodology across the industry, companies can benefit from watching competitors make decisions that impact their products within a common analytical framework.
Business leaders always strive to make better decisions for the present and the future. Other product lifecycle benefits include knowing what to expect and the ability of managers to plan for the future. Managers shouldn’t develop the product in a vacuum, wondering what will happen over time. A declining market share should not catch them off guard. By planning the product lifecycle concept, managers can control the future trajectory of a product.
Other important product lifecycle benefits come from the common context of an analytical approach to business operations. The ability to study how other companies have controlled their product cycles can enable managers to implement strategies to change the course of development or extend a product’s profitability. For example, a company studying the decisions made by market leaders might find a way to apply a new innovation to an existing product to prolong the maturity stage or resist product decline. There are a number of strategies that have been tested by companies over time and may be applicable to another company’s operations simply because there is an analysis framework that standardizes the process.
Internally, some of the benefits of the product lifecycle paradigm go into people management and accountability. With a component structure in place, it is easier to assign personnel to specific phases of product development, identify personnel who are talented in certain areas, and evaluate performance based on milestones and objectives tied to a phase, rather than the product in general. For example, there may be staff members who are particularly adept at new product launches or others who excel at innovative brainstorming for product add-ons to extend the maturity stage. Staff can be assigned to tasks in their areas of expertise and assessed against objectives related to that stage of development.
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