Chapter 3: Product Life Cycle in Theory and Practice Introduction: Product life-cycle management (or PLCM) is the succession of strategies used by business management as a product goes through its life-cycle. The conditions in which a product is sold (advertising, saturation) changes over time and must be managed as it moves through its succession of stages. Product life-cycle (PLC) Like human beings, products also have an arc. From birth to death, human beings pass through various stages e.g. birth, growth, maturity, decline and death. A similar life-cycle is seen in the case of products. The product life cycle goes through multiple phases, involves many professional disciplines, and requires many skills, tools and processes. Product life cycle (PLC) has to do with the life of a product in the market with respect to business/commercial costs and sales measures. To say that a product has a life cycle is to assert three things:
Products have a limited life, and thus every product has life cycle Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller, Products require different marketing, financing, manufacturing, purchasing, and human resource strategies in each life cycle stage.
Chapter Objectives: Explain the nature of PLCs and the stages associated with them; Understand the concept of product cannibalization; Be familiar with the criticisms made of the PLC concept; and Be aware of and be able to explain variants of the classic life cycle. THE PRODUCT LIFE CYCLE A new product progresses through a sequence of stages from introduction to growth, maturity, and decline. This sequence is known as the product life cycle and is associated with changes in the marketing situation, thus impacting the marketing strategy and the marketing mix. The product revenue and profits can be plotted as a function of the life-cycle stages as shown in the graph below:
Figure 3.1. Product Life Cycle Diagram
Conventionally, and as presented in Figure 3.1, the product life cycle is conceived of as having four stages – Introduction, Growth, Maturity and Decline. In this section of our study we shall be concerned with the ‘stretched’ PLC consisting of seven stages by adding ‘ Gestation’ before the Introduction Stage; by including ‘Saturation’ between Maturity and Decline; and by adding a final stage of ‘Elimination’. The stretched PLC is shown in Figure 3.2
Figure 3.2 Stretched PLC
In terms of emphasis we stress the Gestation of New Product Development phase, the Introduction or Launch Phase, and the Elimination Phase. The reason for this emphasis is that not only does it reflect the research interests of the authors but it acknowledges the fact that most marketing management books concentrate on the Growth/Maturity phases as these represent the areas where most marketing activity occurs, i.e the source of most revenue and profit. It is also the principal focus of the marketing management function. PLC can be used as forecasting tools, but only when one has a considerable amount of information about the product and the market into which the product is to be introduced. In the present context, however, the relevance of the PLC is that it is a constant reminder of the inevitability of changes and does mirror the stages through which all successful products pass. THE SEVEN STAGES OF THE PRODUCT LIFE CYCLE Stage One: Gestation (New Product Development) Product development phase begins when a company finds and develops a new product idea. This involves translating various pieces of information and incorporating them into a new product. A product is usually undergoing several changes involving a lot of money and time during development, before it is exposed to target customers via test markets. Those products that survive the test market are then introduced into a real marketplace and the introduction phase of the product begins. During the product development phase, sales are zero and revenues are negative. It is the time of spending with absolute no return. As a consequence of accelerating technological change and increased competition, firms have found it necessary to introduce more and more new products in an effort to distinguish themselves from their competitors and gain competitive advantage. Two consequences follow almost automatically - many new products are stillborn or survive for only a short period of time, and the average product life cycle is shortening as successful new products displace the old. This in turn, has two main effects on marketing management. First, there is a need to accelerate the actual time taken to develop new product – the so called “time to market’ issue. Second, there is the need to get it right first time through a process of Total Quality Management. Of course, the ideal is to be on time and on budget with a product which precisely meets the intended customer’s needs: the goal of the processes, procedures and techniques. But having said that, it has to be recognized that few if any managers are blessed with perfect foresight and there is no known market research technique which can guarantee 100% accuracy in predicting how an intended market will actually respond to a new product. It follows that the firm which launches a less than perfect product, but which has the capability to respond quickly and effectively to customer reactions and feedback, may well outperform the ‘perfectionist’ organization which takes much longer to get to the market.
Stage Two: Introduction (Launch) When a new product is introduced to the market, sales volumes are normally not very high. The volume will normally only increase once a number of potential customers become aware of the product and the benefits it has for them. During the introduction stage the strategic goal normally includes to acquire a strong market position. The goal in respect of the competition dimension is to prevent the early entry of aggressive competitors into the market segment. During the introduction stage of the life cycle, most companies will endeavor to build product awareness and establish a market for the product. The impact on the marketing mix is as follows: 1. The product strategy will normally be to have a limited number of variations of the product in order not to confuse the early adopters. During this stage establishing the product brand and quality level in the market is imperative. The establishment of intellectual property protection such as patents and trademark registration is important aspects to remember. 2. An aggressive pricing policy to maximize market penetration is very common during this phase of the life cycle. If market share is built rapidly the development cost can be removed later. In cases where development cost was high and the life cycle is expected to be short high skim pricing to recover development costs is normally a suitable strategy during this phase. 3. The promotion strategy is normally aimed at innovators and early adopters. Marketing communications will focus on establishing a definite product identity to ensure that the market awareness is maximized. Potential buyers are made aware of the new product, its features, uses, benefits and advantage in order to entice them to buy it. 4. During the introduction phase an exclusive and selective distribution strategy that is aimed at focused distribution channels is a common strategy in order to ensure that the product is available at the correct place for the early adopters. The creation of high profit margins for middle men is also an important component of the distribution strategy for this stage. 5. In cases where the barrier to entry is low it may be more appropriate to have a more extensive and comprehensive distribution strategy to cover as wide a market as possible early on in the life cycle of the product. During the introduction stage, the most important objective is to establish a market and establish a firm initial demand for the product. The marketing communication cost is by and large quite high during this stage of the product life cycle. This is as a result of the need to increase customer awareness of the product rapidly and to ensure that the early adopters are targeted. During the introductory stage a company is normally also expected to incur extra costs associated with the establishment of the initial distribution channels of the product due to the initial inefficiencies that normally exists. The high level of the extra costs to establish a new market at the same time as the low sales volume that is usual for a new product being introduced normally results in the introduction stage to be a time where losses is accumulated. This should not bother the company as these losses are normally more than recovered in the next phase provided that the correct marketing strategies are followed during this introduction stage.
Stage Three: Growth As demand increases, economies of scale will become possible and better prices can be offered. This stage can also be recognized by a rapid increase in sales with profits reaching a peak before it starts to decline. The emergence of competitors during this stage is the biggest threat to the survival of the product. To counter this and maintain the growth for as long as possible the marketing function should focus on the basic features of the product and any additional features that may be added. The primary focus should be to build the brand and get consumers to prefer and choose the product as a result of the brand. The idea is to get some customers to make repeat purchases as a result of the brand recognition. The phase also lends itself to an increase in the distribution channels in order to make the product available to a more extensive audience, thus expanding the market base. Growth stage is characterized by the following: 1. Sales increase rapidly during the growth phase. This increase is due to: (1) consumers rapidly spreading positive word-of-mouth (WOM) about the product; (2) an increasing number of competitors enter the market with their own versions of the product; (3) and a "promotion effect" which is the result of individual firms employing, advertising and other forms of promotion to create market awareness, stimulate interest in the product, and encourage trial. 2. Cost are declining on a per unit basis because increased sales lead to longer production runs and, therefore, scale economies in production. Similarly firms may experience curve effects which help to lower unit variable costs. 3. Because sales are increasing and, at the same time, unit cost are declining, profits rise significantly and rapidly during this stage. 4. Customers are mainly early adopters and early majority. It is the early adopter, specifically, that is responsible for stimulating the WOM effect. During the latter part of growth, the first major segment of the mass market, called the early majority, enters the market. This category of consumers is somewhat more price sensitive and lower on the socio-economic spectrum. As a result, these consumers are somewhat more risk averse and, therefore, somewhat more hesitant to adopt the product. 5. Competition continues to grow throughout this stage. As competitors recognize profit potential in the market, they enter the market with their own versions of the product. As competition intensifies, strategies turn to those that will best aid in differentiating the brand from those of competitors. Attempts are made to differentiate and find sources of competitive advantage. In addition, firms identify ways in which the market can be segmented and may develop focused marketing strategies for individual segments. Stage Four: Maturity Maturity occurs when the new product has successfully displaced the product(s) for which it was a substitute such that all the suppliers of the former product have now switched to its replacement or else quit the market. By the maturity stage the product form will have achieved a state in which it is capable of little if any further physical development. The proliferation of the variants so typical of the growth stage will cease. In maturity, customers know what they want and the physical attributes of the product are well known and understood. Further, market segmentation on the basis of physical differences and usage becomes difficult in not impossible. As a result supplier to the market must look to other forms of differentiation as the basis for building and retaining market share. Thus, it is in the maturity stage that professional marketer is most heavily engaged in developing and delivering an effective marketing mix. Competition becomes much more intense and focused as growth slows down and sellers struggle to avoid price concessions in an increasingly difficult market. Non-price competition based upon
promotion, distribution and service – both presales and after sales – dominate as supplier firms jockey for position. Stage Five: Saturation Saturation is the advanced stage of maturity. By now the market has settled down, usually with three or four major players serving the mass market and a constellation of small firms meeting the specialist needs of the minority. The 80/20 or Pareto principle will usually obtain with a small number of large firms accounting for 80% of sales and a large number of small firms accounting for the remaining 20%. At the saturation stage, sales growth has started to slow and is approaching the point where the inevitable decline will begin. Defending market share becomes the chief concern, as marketing staffs have to spend more and more on promotion to entice customers to buy the product. Additionally, more competitors have stepped forward to challenge the product at this stage, some of which may offer a higher quality version of the product at a lower price. This can touch off price wars, and lower prices mean lower profits, which will cause some companies to drop out of the market for that product altogether. During this period new brands are introduced even when they compete with the company’s existing product and model changes are more frequent (product, brand, model). This is the time to extend the product’s life. Pricing and discount policies are often changed in relation to the competition policies i.e. pricing moves up and down accordingly with the competitors one and sales and coupons are introduced in the case of consumer products. Promotion and advertising relocates from the scope of getting new customers, to the scope of product differentiation in terms of quality and reliability. The battle of distribution continues using multi distribution channels. A successful product maturity phase is extended beyond anyone’s timely expectations. A good example of this is “Tide” washing powder, which has grown old, and it is still growing. Stage Six Decline: This occurs when the product peaks in the maturity and saturation stage and then begins a downward slide in sales. Eventually, revenues will drop to the point where it is no longer economically feasible to continue making the product. Investment is minimized. The product can simply be discontinued, or it can be sold to another company. A third option that combines those elements is also sometimes seen as viable, but comes to fruition only rarely. Under this scenario, the product is discontinued and stock is allowed to dwindle to zero, but the company sells the rights to supporting the product to another company, which then becomes responsible for servicing and maintaining the product. This stage is distinguished by a reduction in market share, declining popularity of the product and falling profits. The decision regarding the future of the product should be carefully considered. This may include continuing with the product as it is, to revitalize the product or to withdraw it from the product offering. One can only justify continuing with the current unchanged product as long as it makes a contribution to profits or enhances the success of the other products in the product mix. This stage is characterized by: 1. Sales continue to deteriorate through decline. And, unless major change in strategy or market conditions occur, sales are not likely to be revived. Costs, because competition is still intense, continue to rise. Large sums are still spent on promotion, particularly sales promotions aimed at providing customers with price concessions. 2. Profits, as expected, continue to erode during this stage with little hope of recovery. 3. Customers are primarily laggards. 4. There generally are a significant number of competitors still in the industry at the beginning of decline. However, as decline progresses, marginal competitors will flee the
market. As a result, competitors remaining through decline tend to be the larger more entrenched competitors with significant market shares. Stage Seven: Elimination This new stage of the product life cycle has been added to recognize that while change is inevitable and most, if not all, products have finite lives, evolution is about the survival of the fittest and the role of management is to ensure the survival of the species. In this analogy, of course, the species is the firm and only if it is a single product firm will survival of the firm and product be the same thing. Usually it is not, for, implicitly or explicitly, firms recognize and understand the implications of the PLC and so seek to develop a portfolio of products each at different stages of their individual life cycle. However, it is sufficient to recognize that the elimination/withdrawal of a product needs to be just as much a conscious and considered decision as was its introduction and launch. This is the time to start withdrawing variations of the product from the market that are weak in their market position. This must be done carefully since it is not often apparent which product variation brings in the revenues. The prices must be kept competitive and promotion should be pulled back at a level that will make the product presence visible and at the same time retain the “loyal” customer. Distribution is narrowed. The basic channel is should be kept efficient but alternative channels should be abandoned. PRODUCT LIFE CYCLE TECHNIQUE EXAMPLE : PRODUCT CANNIBALISM Product cannibalization occurs when a company decides to replace an existing product and introduce a new one in its place, regardless of its position in the market (i.e. the product’s life cycle phase does not come into account). This is due to newly introduced technologies and it is most common in high tech companies. As all things in life there is negative and positive cannibalization. In the normal case of cannibalization, an improved version of a product replaces an existing product as the existing product reaches its sales peak in the market. The new product is sold at a high price to sustain the sales, as the old product approaches the end of its life cycle. Nevertheless there are times that companies have introduced a new version of a product, when the existing product is only start to grow. In this way the company sustain peak sales all the time and does not wait for the existing product to enter its maturity phase. The trick in cannibalization is to know when and why to implement it, since bad, late or early cannibalization can lead to bad results for a company sales. UNFAVORABLE CANNIBALIZATION Cannibalization should be approached cautiously when there are hints that it may have an unfavorable economic effect to the company, such as lower sales and profits, higher technical skills and great retooling. The causes of such economic problems are given below. 1. The new product contributes less to profit than the old one: When the new product is sold at a lower price, with a resulting lower profit than the old one, then it does not sufficiently increase the company’s market share or market size. 2. The economics of the new product might not be favorable: Technology changes can force a product to be cannibalized by a completely new one. But in some cases the loss of profits due to the cannibalization is too great. For example a company that produced ready business forms in paper was forced to change into electronic forms for use in personal computers. Although the resulting software was a success and yield great profits, the sales of the paper forms declined so fast that the combined profit from both products, compared to the profits if the company did not cannibalize the original product showed a great loss in profits. 3. The new product requires significant retooling: When a new product requires a different manufacturing process, profit is lower due to the investment in that process and due to the write-offs linked to retooling the old manufacturing process.
4. The new product has greater risks: The new product may be profitable but it may have greater risks than the old one. A company cannot cannibalize its market share using a failed or failing product. This can happen in high-tech companies that do not understand enough of a new technology so that to turn it into a successful and working product. As a result a unreliable product emerges and replaces a reliable one, that can increase service costs and as a result decrease expected profits. OFFENSIVE CANNIBALIZATION STRATEGIES Cannibalization favors the attacker and always hurts the market leader. For companies that are trying to gain market share or establish themselves into a market, cannibalization is the way to do it5. Also cannibalization is a good way to defend market share or size. A usual practice is the market leader to wait and do not cannibalize a product unless it has to. It is thought that a company should acquire and develop a new technology that will produce a newer and better product than an existing one and then wait. Then as competitors surface and attack market share, cannibalization of a product is ripe. Then and only then quick introduction of a new product into the market will deter competition, increase profits and keep market share. But this strategy does not always work since delays will allow the competition to grab a substantial piece of the market before the market leader can react. DEFENSIVE CANNIBALIZATION STRATEGIES Controlled cannibalization can be a good way to repel attackers as deforesting can repel fire. A market leader has many defensive cannibalization strategies that are discussed bellow. 1. Cannibalize before competitors do: Cannibalization of a company’s product(s) before a competitor does, is a defensive strategy to keep the competitor of being successful. Timing is the key in this strategy. Do it too soon and profits will drop, do it too late and market share is gone. 2. Introduction of cannibalization as a means of keeping technology edge over competition: A good strategy is for a company, that is the market leader, to cannibalize its products as competitors start to catch up in terms of technology advancements. (For example “Intel Corporation” cannibalized its 8088 processor in favor of the 80286 after 2 ½ years, the 80286 in favor of the 386 after 3 years, the 386 in favor of the 486 after 4 years, the 486 in favor with the Pentium after another 4 ½ and so on). So the market leader dictates the pace and length of a product’s life cycle. (In the case on Intel the replacement of 486 to Pentium took so long because competitors had not been able to catch up). 3. Management of cannibalization rate through pricing: When cannibalization of a product is decided, the rate at which this will happen depends on pricing. The price of the new product should be at a level that encourages a particular mix of sales of the old and new product. If the price of the new product is lower than the price of the old then cannibalization rate slows down. If the opposite happens then the cannibalization rate is increased. Higher prices in new products can reflect their superiority over the old ones. 4. Minimization of cannibalization by introducing of the new product to certain market segments: Some market segments are less vulnerable to cannibalization to others. This is because there is more or less to lose or gain for each of them. By choosing the right segment to perform the cannibalization of a product a company can gain benefits without loses and acquire experience on product behavior. Criticisms of the PLC As we have seen, the PLC has the ability to offer marketers guidance on strategies and tactics as they manage products through changing market conditions. Unfortunately, the PLC does not offer a perfect model of markets as it contains drawbacks that prevent it from being applicable to all products. Among the problems cited are:
Shape of Curve – Some product forms do not follow the traditional PLC curve. For instance, clothing may go through regular up and down cycles as styles are in fashion
then out then in again. Fad products, such as certain toys, may be popular for a period of time only to see sales drop dramatically until a future generation renews interest in the toy. Length of Stages – The PLC offers little help in determining how long each stage will last. For example, some products can exist in the Maturity stage for decades while others may be there for only a few months. Consequently, it may be difficult to determine when adjustments to the Marketing Plan are needed to meet the needs of different PLC stages. Competitor Reaction not Predictable – As we saw, the PLC suggests that competitor response occurs in a somewhat consistent pattern. For example, the PLC says competitors will not engage in strong brand-to-brand competition until a product form has gained a foothold on the market. The logic is that until the market is established it is in the best interest of all competitors to focus on building interest in the product form itself and not on claiming one brand is better than another. However, competitors do not always conform to theoretical models. Some will always compete on brand first and leave it to others to build market interest for the product form. Arguments can also be made that competitors will respond differently than what the PLC suggests on such issues as pricing, number of product options, spending on declining products, to name a few. Impact of External Forces – The PLC assumes customers’ decisions are primarily impacted by the marketing activities of the companies selling in the market. There are many other factors that can affect a market which are not controlled by marketers. Such factors (e.g., social changes, technological innovation) can lead to changes in market demand at rates that are much more rapid than would occur if only marketing decisions were being changed (i.e., if everything was held constant except for company’s marketing decisions). Use for Forecasting – The impact of external forces makes it difficult to use the PLC as a forecasting tool. For instance, market factors not directly associated with the marketing activities of market competitors, such as economic conditions, may have a greater impact on reducing demand than customers’ interest in the product. Consequently, what may be forecasted as a decline in the market signaling a move to the Maturity stage may in fact be the result of declining economic conditions and not a decline in customers’ interest in the product. In fact, it is likely demand for the product will recover to growth levels once economic conditions improve. If a marketer follows the strict guidance of the PLC they would conclude that strategies should shift to those of the Maturity stage. Doing so may be an over-reaction that could hurt market position and profitability. Stages Not Seamlessly Connected – Some high-tech marketers question whether one stage of the PLC naturally will follow another stage. In particular, technology consultant Geoffrey Moore suggests that for high-tech products targeted to business customers a noticeable space or “chasm” occurs between the Introduction and Growth stages that can only be overcome by significantly altering marketing strategy beyond what is suggested by the PLC.
While not perfect, the PLC is a marketing tool that should be well understood by marketers since its underlying message, that markets are dynamic, supports the need for frequent marketing planning. Also, for many markets the principles presented by the PLC will in fact prove to be very much representative of the conditions they will face in the market. Deviant Cases – fads and fashions As mentioned at a number of places previously, all life cycles do not conform to the classic Sshaped curve or U-shaped distribution. It is these ‘deviant’ cases which are usually invoked as evidence of the non-applicability of the PLC concept. The best known exceptions to the PLC rule are fads and fashions. Apparel and other consumer products can be classified by the length of their life cycles. Basic products such as T-shirts and blue jeans are sold for years with few style changes. Businesses
selling basic products can count on a long product life cycle with the same customers buying multiple units of the same product at once or over time. The life cycle curves of basic, fashion, and fad products are pictured below. Figure 3.3 Life Cycle for Basic and Fashion Products
Fashion product life cycles last a shorter time than basic product life cycles. By definition, fashion is a style of the time. A large number of people adopt a style at a particular time. When it is no longer adopted by many, a fashion product life cycle ends. Fashion products have a steep decline once they reach their highest sales. The fad has the shortest life cycle. It is typically a style that is adopted by a particular subculture or younger demographic group for a short period of time. The overall sales of basic products are the highest of the three types of products, and their life cycles are generally the longest. Apparel products often have a fashion dimension, even if it is just color. As fashion features increase in a product, the life cycle will decrease. Therefore, if you are designing a fashion product, you will want to have multiple products in line for introduction as each fashion product's cycle runs its course. Some firms build their lines to include basic, fashion, and fad products in order to maximize sales. For example, with a sweater line, a business may have four styles that have classic styling and colors and are always in the line. Four additional styles may be modified every two years to include silhouette, length, and collar changes based on the current fashion. One or two shortcycle fashion or fad styles based on breaking trends may be introduced once or twice a year. Styles that a popular celebrity or sports hero is wearing are examples of fashion and fad styles. We can also look at the number of fashion product adopters against time. Five types of consumers emerge at each of the life cycle stages. Figure 3.4 Fashion Adoption Consumer Types
Different marketing strategies should be used to reach each of these consumer types.
Fashion innovators adopt a new product first. They are interested in innovative and unique features. Marketing and promotion should emphasize the newness and distinctive features of the product.
Fashion opinion leaders (celebrities, magazines, early adopters) are the next most likely adopters of a fashion product. They copy the fashion innovators and change the product into a popular style. The product is produced by more companies and is sold at more retail outlets. At the peak of its popularity, a fashion product is adopted by the masses. Marketing is through mass merchandisers and advertising to broad audiences. As its popularity fades, the fashion product is often marked for clearance, to invite the bargain hunters and consumers, the late adopters and laggards, who are slow to recognize and adopt a fashionable style.
USE OF PRODUCT MANAGEMENT FOR SUCCESSFUL PRODUCT LIFE CYCLE Product management is a middle level management function that can be used to manage a products life cycle and enables a company to take all the decisions needed during each phase of a product’s life cycle. The moment of introduction and of withdrawal of a product is defined by the use of product management by a Product Manager. A Product Manager exists for three basic reasons. For starters he manages the revenue, profits, forecasting, marketing and developing activities related to a product during its life cycle. Secondly, since to win a market requires deep understanding of the customer, he identifies unfulfilled customer needs and so he makes the decision for the development of certain products that match the customers and so the markets needs. Finally he provides directions to internal organization of the company since he can be the eyes and ears of the products path during its life cycle. To improve a product success during each of its phase of its life cycle (development - introduction – growth – maturity – decline), a product manager must uphold the following three fundamentals. 1. Understand how product management works: When responsible for a given new product, a product manager is required to know about the product, the market, the customers and the competitors, so that he can give directions that will lead to a successful product. He must be capable of managing the manufacturing line as well as the marketing of the product. When the product manager has no specific authority over those that are involved in a new product, he needs to gather the resources required for the organization to meet product goals. He needs to know where to look and how to get the necessary expertise for the success of the product. 2. Maintain a product / market balance: The product manager as the person that will make a new product to work, needs to understand and have a strong grasp of the needs of the customer / market and therefore make the right decisions on market introduction, product life cycle and product cannibalization. To achieve the above he must balance the needs of the customers with the company’s capabilities. Also he needs to balance product goals with company objectives. The way a product’s success is measured depends on where the product is in its life cycle. So the product manager must understand the strategic company direction and translate that into product strategy and product life cycle position. 3. Consider product management as a discipline: Managing a product must not be taken as a part time job or function. It requires continuous monitoring and review. Having said that, it is not clear why many companies do not consider product management as a discipline. The answer lies in the fact that product management is not taught as engineering or accounting i.e. does not have formalized training.
Summary All products and services have certain life cycles. The life cycle refers to the period from the product’s first launch into the market until its final withdrawal and it is split up in phases. During this period significant changes are made in the way that the product is behaving into the market i.e. its reflection in respect of sales to the company that introduced it into the market. Since an increase in profits is the major goal of a company that introduces a product into a market, the product’s life cycle management is very important.
The understanding of a product’s life cycle, can help a company to understand and realize when it is time to introduce and withdraw a product from a market, its position in the market compared to competitors, and the product’s success or failure. Irrespective of whether a product has a normal or deviant life cycle, it is clear that eventually this will come to an end, leading to the death of the industry responsible for its creation. But, while technologies may be superseded and replaced, firms strive to survive. To do so it is necessary to anticipate and manage change and this means avoiding putting all your eggs in one basket. To survive the firm needs to innovate and develop a sequence of new products at different stages in their individual life cycles.
