1.3.5 Product life cycle and portfolio

Question 1

What is the product life cycle? 1

Answer 1

• Pattern of sales over time that most products tend to follow

Question 2

What is are the phases involved in the product life cycle? 4

Answer 2

• Development - Introduction - Growth - Maturity - Decline

Question 3

What effective decisions can be made from the product life cycle? 2

Answer 3

• Pricing decisions - Advertising spending

Question 4

What is an extension strategy? 1

Answer 4

• Medium to LT plan for extending the life cycle of a product

Question 5

What are examples of extension strategies?

5

Answer 5

• Advertisement
• Price reduction
• Adding value (new feature)
• Explore new markets
• New packagin

Question 6

What does the Boston Matrix do?

1

Answer 6

• Assesses each product within a firms product portfolio

Question 7

Can you label each quadrant of the Boston Matrix

1

Answer 7

Question 8

What would be a firms strategy for stars?

2

Answer 8

• Need a lot of investment to fight off comp: holding
• Maintain their market share = LT profitability

Question 9

What would be a firms strategy for cash cows?

3

Answer 9

• Defend their market share
• Reduce investment / maximise cash flow (milk prof)
• Use their cash cow profits to invest in problem child/stars

Question 10

What would be a firms strategy for problem child?

2

Answer 10

• Invest in (^their market share): building
• Build comp advantage (positioning)

Question 11

What are dogs like and what would be a firms strategy for them?

2

Answer 11

• Unattractive memebers of portfolio
• Killed off (divest)