The product life cycle paradigm helps businesses make decisions based on a shared archive of industry knowledge and strategy. By structuring the product development process, it can be analyzed over the course of time to identify patterns. The results of business decisions made during life cycle stages can be quantified and compared to decisions made by competitors.
There are many advantages of the product life cycle structure. Under this approach, products are viewed as going through four stages: introduction, growth, maturity and decline. By breaking product development into four components, decisions made to impact each component are more easily tracked and evaluated. Since the product life cycle approach is a standard methodology throughout industry, companies can benefit from watching competitors make decisions that affect their own products within a common analytical framework.
Business managers are always striving to make better decisions for the present and the future. Other advantages of the product life cycle include the knowledge of what to expect and the ability of managers to plan for the future. Managers do not have to develop the product in a vacuum, wondering what will happen over the course of time. A declining market share does not have to catch them unawares. By planning around the concept of the product life cycle, managers can control the future trajectory of a product.
Other important advantages of the product life cycle stem from the common context of an analytical approach to business operations. The ability to study how other companies have controlled their product cycles can enable managers to implement strategies to change the course of development or prolong a product's profitability. For example, a company that studies the decisions made by market leaders might find a way to apply a new innovation to an existing product to prolong the maturity stage or resist product decline. There are numerous strategies that have been tested by businesses over the course of time and can be applicable to another company's operations simply because there is an analysis structure that standardizes the process.
Internally, some of the advantages of the product life cycle paradigm go to staff management and accountability. With a component structure in place, it is easier to assign staff to specific product development stages, identify staff who have talent in certain areas and evaluate performance based on goals and objectives that are tied to a stage, rather than the product generally. For example, there may be staff members who are particularly adept at new product launches or others who excel at innovative brainstorming for product add-ons to prolong the maturity stage. Staff can be assigned to tasks in their areas of competency and evaluated based on targets that relate to that one development phase.