Examine each stage of the product life cycle. Which stage do you think is most important? Which stage has the highest risk? Which stage seems to hold the greatest profit potential? Which stage would seem to need the greatest amount of ''hands-on'' management? 

 

Examining each stage of the product life cycle namely: Development, introduction, growth, maturity and decline answers the following questions:

• The stage which is most important

The development stage is deemed to be the most important of all for it gives birth to the actual product that is to be placed pout there. A failure at this stage would mean a failure in the whole process of product cycle and the proceeding stages will not have any meaning if the idealisation and actualisation of a product was poorly done. For this reason, producers put much effort in product and market research to get the best result out of this stage.

• The stage having the highest risk

The development stage still holds the highest risks. This is because it involves costs accumulation with no corresponding revenue. For products requiring large amount of time and large capital investment to develop and then test, the risk is even higher. Consequently, outside funding sources are limited and this may drain the available funds from product owners and even with the borrowed funds, the guarantee of ability to repay is highly limited. This stage also presents very little guarantee of return of the invested funds and profitability as the level of uncertainties into the future highly exists.

• The stage holding the greatest profit potential

The stage holding the greatest potential is the growth stage. At this stage, the product has been accepted by customers and the owners are striving to increase market share. For innovative products there is limited competition at this stage, so pricing can remain at a higher level. Both product demand and profits are increasing, and marketing is aimed at a broad audience. Funding for this stage is generally still through lenders or through the increasing sales revenue.

• The stage which need the greatest amount of ''hands-on'' management. 

The stage needing much effort in terms of management is the maturity stage. This is because competition at this stage is at the top and thereof a need to change, redefine or adjust the strategies with regard to product features and marketing so product to maintain market share and survive the competition as long as possible. This calls for efficient management to keep the product up there.