Why Waiting Too Long Can Cost You – The Product/Services Life Cycle Curve
Nothing lasts forever, and no champion remains in first place without working hard to maintain their position. In the same way, understanding the life cycle of your products or services is a fundamental aspect of strategic decision-making. This knowledge empowers you to anticipate consequences, plan proactively, and maintain innovation and competitiveness within your industry.
If you’ve been following along, you’re probably already familiar with the Organizational Life Cycle Curve, a tool for comprehending your organization’s evolution. Now, let’s dive into the Product/Service Life Cycle Curve, a similar concept but focused on your specific products or services. This curve classifies your offerings into four key stages: Introduction, Growth, Maturity, and Decline, offering a snapshot of your product/service pipeline’s health.
A Diverse Product/Service Pipeline
Using the Product/Service Life Cycle Curve provides a clear overview of your products’ and services’ positions within their respective lifecycles. The key question is whether your product/service portfolio is balanced across the first three stages or if it’s mainly concentrated in the Maturity phase. Ensuring you have offerings in multiple stages not only fosters resilience but also bolsters your ability to sustain and expand your organization. Waiting until most products/services are in late maturity or decline makes it more difficult to reinvent and organizations may make desperate decisions rather than wise ones.
One notable strength of the Product/Service Life Cycle Curve is its ability to look ahead. It serves as a valuable tool for understanding your organization’s performance more comprehensively. If we allow all of our products and services to stagnate in the maturity phase, new competitors or margin pressures will eventually drive those products and services into decline. Typically decline happens at a faster rate than a new product or service can be launched and entering the growth phase. Given the available resources in the maturity phase, embracing change at this stage can be a critical factor reinventing ourselves and sustaining success.
Accurate knowledge of your products’/services’ positions empowers you to make proactive strategic decisions for your business. This will involve both making exciting decisions and really hard decisions. It may mean saying goodbye to a product/service that you hoped (maybe for years) would miraculously resurrect itself. You may also get the opportunity to create something that changes the landscape!
In essence, the Product/Service Life Cycle Curve is a practical framework that helps you identify where stagnation is happening and guides your business toward long-term success. By embracing this concept, you’re better equipped to navigate the shifting terrain of customer needs and competitive markets, setting your organization on a path to thrive.
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