Strategic Analysis and Planning with MATRIX V5
Tutorial Step 10 - Product Life Cycle Analysis

The Product Life Cycle concept is fully supported by MATRIX V5, the software application for business strategists. It states that business opportunities move through the following 'life-cycle' phases:

• Introduction: Sales volumes / Revenues start off relatively low and show a slow rate of growth as sales are limited to innovators and early adopters.
• Growth: After a while, Sales volumes / Revenues increase as the solution gains acceptance in the market.
• Maturity: Volumes and Revenues remain relatively high, but the rate of growth starts to slow down as the market potential is reached.
• Decline: As the market reaches saturation (and other more innovative solutions present themselves) sales Volumes / Revenues start to decline. Repeat sales are made to existing customers and new sales are made only to the ‘laggards’.

If the strategist can accurately assess the position of his product offering within the life cycle, he can determine the potential left within the market and can make informed decisions about product enhancement, or new product development to meet emerging market needs.

Product Life Cycle Analysis And MATRIX V5

Below - An example of a Life Cycle Analysis chart produced by MATRIX V5.

Note, the ability to review the Host Company's performance juxtaposed to Niche and key Competitor performance provides useful information about whether:

• the Host Company is growing faster, as fast as, or slower than the Niche,
• the Host Company is growing faster, as fast as, or slower than Key Competitors,
• key Competitors are growing faster, as fast as, or slower than the Niche.

A 'key' can be revealed on the left-hand side of the chart by clicking and dragging the chart edge. Hotspots, accessed by moving the cursor over the plotted chart provide on-screen information about the Niche, Supplier, and Volume / Revenue / Gross Margin at any given time. The chart can also be copied and pasted into a compatible graphics or presentation package by means of the Right-Hand Mouse Click / 'Copy to Clipboard' function.

Underlying data which feeds the chart (i.e. Volumes, Revenues and Gross Margins) are entered via the Market History And Forecast Data Editor.

The 'Select Life Cycle Analysis' Dialogue

MATRIX V5 is an 'expert user' software tool which provides great flexibility when plotting 'Life Cycle Analysis' charts. Tabs on the 'Select Life Cycle Analysis' dialogue give the user choice in the format and detail of the plot.

To display the 'Select Life Cycle Analysis' dialogue, click the 'Life Cycle Analysis' button (above) which is located on the toolbar.

To display the Life Cycle Analysis chart shown earlier, select the Europe / Metallic Assemblies / Industrial Niche on the Segmentation Matrix. The following settings are required within the ‘Select Life Cycle Analysis’ Dialogue:

1. Scope: Select ‘HandyMan PLC, Key Competitors and Niche’
2. Data: Select ‘Volume’
3. Sum: Select ‘Niche / Market In Focus’
4. Format: Select ‘Curve’, and tick the ‘Points’ Tick Box
5. Also, tick the ‘View Key’ Tick Box

Clicking the 'Plot' button now reveals the required example.

The Tabs In Detail ...

1. Scope
Enables a plot for the Host Company , the Host Company and Key Competitors , and the Host Company, Key Competitors and the Niche

2. Data
Depending upon the options selected in File / Preferences (Input and Analysis), enables Volume, Revenue or Gross Margin based analysis.

3. Sum
Enables data to be summed by Product, Segment, Market or Scenario. Examples include Product / Scenario in Focus and Segment / Scenario in Focus .

4. Format
Enables the plot as a Straight Line , or Curve . Point markers for each year can also be selected.

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