Strategic Planning in the Small Business

Unit 2

HO 2-4 (continued)

Figure 1-I

Stages in Product Life Cycle

Sales

Volume

Introduction Growth' Maturity

Decline

Time

are being offered by competitors arnd

the business does not

possess

a strong market share position. Managers

may need to

search for new products or reposition the

business to deal with

this threat.

In addition to knowing

the product's position on the life

cycle, one must also understand

how long it will take the prod­

uct to move through

each stage of the cycle. Products may be

approaching maturity,

but if this stage is seen as lasting for

a

lelgthy period, the impetus for

immediate action is lessened.

Similarly, relying

too heavily on a product caught in the intro­

duction stage

for

a

long period of time may adversely affect

sales. Many factors, most notably the availability

of substitutes,

will affect the rapidity of movement

through the product stages.

Misreading

of the level and extent of demand can produce

harsh consequences,

as noted in the Gabler Corporaion situ­

ation in

Capsule 1-2.

30 Part One The Analysis Phase

173