Financial cycle and Product life cycle II
Feb 28, 2024 2:34:03 GMT -5
Post by account_disabled on Feb 28, 2024 2:34:03 GMT -5
Returning to the topic of the financial life cycle and the market life cycle of a product, it is interesting to look at the topic from another point of view. The aspect of the product life cycle also has interesting repercussions regarding the breadth and possibilities offered by its market, which is why drawing a parallel with other aspects of strategic marketing becomes useful and effective, in order to increase one's chance of success. Returning to the financial cycle table , we can also intuit some interesting parallels with the famous matrix of the Boston Consulting Group Product portfolio management BCG matrix Matrix Boston Consulting GroupMatrix Boston Consulting Group Even if it is a matrix that now has several limitations due to the growth of many markets which make the representations unstable, a first consideration can be made starting from the box at the top right : here the situation is typical of a product just introduced on the market with a low market share, but which introduced into a developing market has good growth potential; in this phase the cash flows and turnover are low and the request for capital to invest is considerable, as is the self-financing margin.
In this case it is a choice to be made based on the Marketing Manager's experience Paraguay Phone Number and knowledge of the market and the results of the market surveys carried out. Going to the top left quadrant , it is a product that has already expanded its market share, and is waiting for the first increases in turnover to begin to occur with the coverage of costs along with them. This is the growth/development phase, in which there could be a high rate of development of turnover, and a request for capital to invest that is not too high, typical of those products which have already been introduced on the market for a certain time but do not yet need of particular technical changes (perhaps only small restylings, as happens in the car market) and with a positive cash flow. In the third quadrant (cash cows or cash cows) we find, however, a product already widely known on the market, well introduced and with an already large share, which does not require particular investment pushes and from which an excellent turnover can already be obtained , useful for self-financing and for freeing oneself from external debt constraints.
An example of a similar product/industry could be smartphone accessories (or any other product/industry that is experiencing a period of stability in the growth of its market share). The last quadrant is typical of the product already in decline, which is no longer capable of producing turnover and cash flow and whose market share is in constant (and slow or fast) decline. In these cases, since the self-financing capacity as well as the cash flow is very limited, we should start to rethink the technical structure of the product, its repositioning or its elimination from the market in order to be replaced by a product, perhaps technically more updated. . As I have repeated several times, these schematizations are obviously not so rigid in reality, but it is important to understand their meaning to allow us to look inside a market situation relating to a product in the face of which we do not know what kind of initiatives to undertake. It can often happen that, even if we think we are faced with a product in decline, it is sufficient to introduce a very small change for sales to increase again and the cycle is repeated again.
In this case it is a choice to be made based on the Marketing Manager's experience Paraguay Phone Number and knowledge of the market and the results of the market surveys carried out. Going to the top left quadrant , it is a product that has already expanded its market share, and is waiting for the first increases in turnover to begin to occur with the coverage of costs along with them. This is the growth/development phase, in which there could be a high rate of development of turnover, and a request for capital to invest that is not too high, typical of those products which have already been introduced on the market for a certain time but do not yet need of particular technical changes (perhaps only small restylings, as happens in the car market) and with a positive cash flow. In the third quadrant (cash cows or cash cows) we find, however, a product already widely known on the market, well introduced and with an already large share, which does not require particular investment pushes and from which an excellent turnover can already be obtained , useful for self-financing and for freeing oneself from external debt constraints.
An example of a similar product/industry could be smartphone accessories (or any other product/industry that is experiencing a period of stability in the growth of its market share). The last quadrant is typical of the product already in decline, which is no longer capable of producing turnover and cash flow and whose market share is in constant (and slow or fast) decline. In these cases, since the self-financing capacity as well as the cash flow is very limited, we should start to rethink the technical structure of the product, its repositioning or its elimination from the market in order to be replaced by a product, perhaps technically more updated. . As I have repeated several times, these schematizations are obviously not so rigid in reality, but it is important to understand their meaning to allow us to look inside a market situation relating to a product in the face of which we do not know what kind of initiatives to undertake. It can often happen that, even if we think we are faced with a product in decline, it is sufficient to introduce a very small change for sales to increase again and the cycle is repeated again.