Before we dive into product development, it’s crucial to grasp the macro-level stages that products and companies experience. This is what we refer to as the product life cycle.
Once a company has started or developed a new product, they go through four stages: introduction, growth, maturity, and decline. These stages indicate the revenue generated over time, the growth rate, and the monthly recurring revenue, among other factors.
Let’s briefly explore each of these four phases.
The introduction phase is when a company first introduces a product to the market, usually with little to no competition. During this phase, the business often incurs losses, and the initial adopters are the primary buyers.
Next, we have the growth phase. At this point, the product has gained acceptance in the market, and sales start to rise. Typically, growth begins with early adopters and gradually expands to a broader customer base. While there might be a few competitors, the organization may enhance the product to maintain its competitiveness.
The third phase is maturity. In this stage, sales reach their peak, but competitors enter the market with alternative solutions. The marketplace becomes highly competitive, and the company that introduced the product may find it challenging to compete effectively.
Lastly, we have the decline phase. During this stage, sales diminish as the product and company reach their saturation point. With intense competition and declining demand, many products are phased out from the marketplace. The perception of the item shifts from being new and exciting to outdated and less relevant.
It’s essential to note that the specifics of these phases can vary depending on the product and industry. Moreover, it’s crucial to understand that these stages serve as a framework for understanding how companies and products evolve. There is no definitive guide to precisely determine where a company or product stands within these phases; it’s more of a conceptual tool.
Now that we’ve explored the four phases — introduction, growth, maturity, and decline — can you think of some real-life companies that exemplify each stage? Let me know, or wait for the next article.
