PRODUCT

Product Life cycle

Product Life cycle



1) Cost of Each stage

8000, 4000, 2000, 1000, 1000

2) almost every product pass through the testing stage.

3) £12000

5) The product cost determines its selling price and, to a large extent, its market attractiveness. This is not to say that price is the sole determinant of what the buyers fi nd attractive about a product; cheaper but inferior-quality products tend to fall by the wayside. The price does determine profi tability, however, and it is in this context that product cost is important. Product cost is a function of both fi xed costs, such as tooling and capital equipment costs, and variable costs, such as material and labor costs.

How much money the business spends on developing the product, from concept to prototype, also determines the profi tability. A product does not become profi table until the development costs are fully recovered. the relationship between the cumulative cash flow and product life cycle. Unless a product satisfi es customers' needs and is considered dependable, it will not succeed in the marketplace. The quality of the product, therefore, is the ultimate determinant of the price customers are willing to pay for it. The share of the market a product gains is refl ected by its quality.

6) Sanyo Electric Co., Ltd will need to determine the financial sources available to them that allow them to promote global investment of the product. Several sources are available such as creating joint ventures with a second party, soliciting private investors and venture capitalists, new issuance of stock to the public, and issuing short and long-term bonds. In promoting global investment for their refrigerators, Sanyo Electric Co., Ltd, could additionally seek funding from financial institutions and banks within Japan.

Sanyo Electric Co., Ltd could find that engaging in a joint venture with another entity could provide the optimal financing source for the promotion and launching of their refrigerator line in foreign countries. While the company has locations in numerous countries worldwide, a joint venture may be beneficial to them in countries where they may not have a strong brand presence or recognition. In addition, collaborating with any of the developing countries will help the company establish a relationship and allow for easier promotion of their product.

Product life cycle is a continual point of focus for companies in their strategic planning. As new products emerge and existing products continue to exist, companies need to assess the stages of the product life cycle and determine the necessary steps to keep the product growing and generating revenue. Eventually, every product will pass through all stages of the product life cycle and cease to exist in the current form.

7) Products that sell well and make a healthy profi t (measured by the minimum attractive rate of return a business establishes for itself) refl ect a successful product development process. However, as shown in Figure 1.9, sales grow slowly; consequently, it takes time to assess profi tability. As a result, we must rely on the defi nition of manufacturing ...