Minglana, Mitch T.

BSA 201

CHAPTER 3 – IMMEDIATE COMPETITIVE ENVIRONMENT

ACTIVITY 4: Summarize the following:

PRODUCT LIFE CYCLE:

Product life cycle (PLC) is the cycle through which every product goes through from introduction to
withdrawal or eventual demise. The product life cycle has 4 very clearly defined stages:


Introduction: When a product enters the life cycle, it faces many obstacles. Although competition
may be light, the introductory stage usually features frequent product modifications, limited
distribution, and heavy promotion.
 Growth: If a product survives the introductory stage, it advances to the growth stage of the life
cycle. In this stage, sales grow at an increasing rate, profits are healthy, and many competitors
enter the market.
 Maturity: After the growth stage, sales continue to mount—but at a decreasing rate. This is
the maturity stage. Most products that have been on the market for a long time are in this stage.
 Decline (and death): When sales and profits fall, the product has reached the decline stage.

Boston Box Matrices:

The Boston Consulting group’s product portfolio matrix (BCG matrix) is designed to help with long-
term strategic planning, to help a business consider growth opportunities by reviewing its portfolio of
products to decide where to invest, to discontinue or develop products. It's also known as
the Growth/Share Matrix.
The Matrix is divided into 4 quadrants based on an analysis of market growth and relative market
share, as shown in the diagram below.

 Dogs: These are products with low growth or market share.

 Question marks or Problem Child: Products in high growth markets with low market
share.
 Stars: Products in high growth markets with high market share.
 4. Cash cows: Products in low growth markets with high market share

Ansoff Matrix theory:

The Ansoff Matrix, also called the Product/Market Expansion Grid, is a tool used by firms to analyze
and plan their strategies for growth. The matrix shows four strategies that can be used to help a firm
grow and also analyzes the risk associated with each strategy.
The four strategies of the Ansoff Matrix are:
 Market Penetration: This focuses on increasing sales of existing products to an existing
market.
 Product Development: Focuses on introducing new products to an existing market.
 Market Development: This strategy focuses on entering a new market using existing
products.
 Diversification: Focuses on entering a new market with the introduction of new
products.