Product Life Cycle – Growth

If we have developed a product that is useful to our clients, our production volumes will grow allowing us to improve our product cost and pricing structures. Additionally, besides the volume purchase of material cost improvements, we will work with our manufacturing line, improving those processes and subsequent first pass yields thereby reducing the associated rework costs. We may choose to steadily drive our price down also to increase the number of consumers benefiting (as well as our company). It is possible to both reduce the sale price of the product AND improve the profit.  This situation is unlikely to last for long as other potential suppliers see our success and want to follow our lead with their own offering.

We will see further coverage or refinements in our product delivery methods. We can see securing other contracts for the product with more customers over time, adding to those we have already acquired so we see the amount of the product we produce steadily grow.

Also during the growth phase of the product, we may find other adaptation for the product.  If we designed the product to be extensible, we may elect to reinvest some of the profits into the product to meet more consumer demands that price cannot alone achieve.  In doing so we improve our sales volumes yet more (or again).  Small adaptations to the product may allow us to penetrate entirely different and prior untapped market segments.  If the product has software components, we may be able to radically alter the performance or the features facilitating access to these other areas.

Eventually, our rate of growth will start to decline. Though the slope is still positive, we will have a lower rate of slope (less steep) as we move to the maturity phase in our product lifecycle.

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