Personal Computer s Life Cycle Stage and Relevant Costs
The stages that a product develops over time is commonly called the “Product Life Cycle”. The classic product life cycle has four stages as shown in Figure 1 - introduction; growth; maturity and decline. The first personal computer was introduced in 1970. At the Introduction Stage the market size and growth was very slight. Substantial research and development costs had been incurred in getting the product to this stage. In addition, marketing costs were very high because they needed to test the market. ... Most companies will not profit on products in the Introduction Stage. Products at this stage have to be carefully monitored to ensure that they start to grow. ... The personal computer was in its growth stage until the late 1990’s. ... At the Growth Stage, there was a rapid growth in sales and profits. ... The personal computer is presently in the Maturity Stage. ... Marketing and finance are key activities during this stage. ... Any costs on research and development are likely to be used to modify or improve the product. In order for a company to succeed in the computer business, they have to have a good quality and moderately priced product to appeal consumers. In the Decline Stage, the market is dwindling, reducing the overall amount of profit that can be shared amongst the remaining competitors. At this stage, the product has to be managed carefully. It may be possible to cut some of the production costs, transfer production to a cheaper facility, or sell the product into other, cheaper markets. ... I do not foresee this happening in the near future to the personal computer.