Are You Using Product Lifecycle Management to Achieve Your Growth Goals?
For many organizations, the answer is No. When it comes to Product Lifecycle Management, organizations and their Product Managers tend to place substantial emphasis on the early stage of the product lifecycle, (Introduction) and not nearly enough time on products in the advanced stages (Growth, Maturity, and Decline).
Regardless of the reasons, most Industrial, B2B companies are making a miscalculation by failing to execute comprehensive product lifecycle management. They miss out on the impact a thorough analysis of the existing product mix can have on the company’s ability to drive growth.
The Importance of Product Lifecycle Management for Advanced Stage Products
Industrial companies deal with three important realities: (1) Revenue and profits from the existing product mix represent as much as 75% or more of the entire product portfolio! (2) Industrial products tend to have longer product lifecycles. (3) New product development takes longer and is costlier to implement.
While new product development is essential, company growth is still very dependent on the continued viability of existing products as the foundation for long term growth. In today’s business environment, where revenue and profits of existing products are under increasing competitive pressure and risk, additional time and effort, should be spent proactively managing existing products.
Comprehensive Product Lifecycle Management Increases Your Strategy Options
When Product Lifecycle Management is primarily focused or heavily driven by Introductory stage products (New Product Development) only 2 of four strategy options (Product Development and Diversification) are in play.
When focus to existing products in the Growth, Maturity, and Decline stages of the lifecycle is added, Product Managers put the other 2 strategy options (Market Penetration and Market Development) in play as well.
Optimize Product Lifecycle Management Maximize Growth
New product introduction is essential to the vitality of a product line and the long-term health and profitability of a company, but it comes with high cost and risk. It also only addresses 25% of the product lifecycle, and 50% of your strategy options.
Comprehensive Product Lifecycle Management, allows organizations and their product managers, to balance risk and cost more effectively. Product Managers will have more strategy options to accommodate short- and long-term needs. Ultimately, Product Managers will optimize their product portfolio, target products to markets more effectively, maximize financial results, and drive growth.
Greg DiCillo, president of Maximal Product Management and author of Dominate Your Space: Unleashing the Power of Your Product Managers, shares his research insights with companies that want practical steps to establish a culture of high-performance product portfolio management.
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