Product Life Cycle – Maturity
We have seen our product and our sales volume grow, and we begin to see that rate of growth slow. We are entering the maturity phase of our product life cycle. In the maturity phase we are no longer acquiring customers at our previous rate. The market is becoming saturated; perhaps there are newer versions or competing products from other suppliers. No matter the reason, we can see that our product is nearing the end of the useful cycle. We should be planning some other product to replace this incoming revenue as we steadily watch the rate of growth reduce. We can extend this maturity phase, perhaps, with cost improvement techniques. Though our production and distribution processes can be quite mature, there is always the possibility of stemming the rate of decline via cost improvement techniques – a few of which we provide below (more can be read in our Reducing Process Cost book)
- Lean Manufacturing
- Total Quality Management
- Six Sigma
- Product Tear downs
All of these activities can help us understand where our costs can be better controlled thus retaining our profit in the face of sales volume reductions. These techniques have a range of sophistication or complexity meaning any organization can use to ascertain and improve their cost structure.
Nevertheless, we will eventually see the product steadily decline until we reach the point where there is no growth or zero slope – the harbinger of the next phase decline. Beyond this point, we will see a loss of customers and sales volumes that are hallmark of the product decline.