Product Life Cycle Management and Product Essay

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1. Overall, the company did a good job in dales and in profits over the five-year period. According to the annual sales and profit tables, we can easily find out that the annual total sales and total profit was increasing from 2007 to 2011. However, the company’s return on sales was declining each year. Specifically, each product’s performance is different from each other. For product A, the annual sales and profit keep same in 2007 and 2008, and then they decrease persistently from 2009 to 2011. In addition, the percentage of product contribution to sales and profit for product A were gradually reduced to 6.25% and 8.2% respectively. These changes have occurred may because the product A was in the decline stage of its product life cycle. Also, other products’ growth of sales and profits may result in those changes of product A. The annual sales and profit were increasing over the last five years for both product B and C. The percentage change in sales for product B was raising from 30% in 2008 to 36.36% in 2011; nevertheless, the product C’s percentage change in sales was declining from 42.86% in 2008 to 11.11% in 2011. Moreover, the percentage of product contribution to profit for both product B and product C was increasing. The product B’s percentage of product contribution to sales was growing from 2007 to 2011; however, the product C was increasing from 2007 to 2010 and decreased slightly to 25% in 2011. The reason of these changes is that both product B and product C entered the growth stage, which their sales and profits are increased, of their product life cycles. The declined percentage of product contribution to sales for product C in 2011 is because of introducing the new product D, which influenced the sales of product C. For product D, it’s sales raised really fast from 2010 to 2011. That is because it was in the later period of the introduction stage of its product life cycle. For the product E, the annual sales and profit was decreasing from 2007 to 2008, increasing from 2008 to 2009, and then declining from 2009 to 2011. Its percentage change in sales was decreasing from 2008 to 2011 roughly. Furthermore, the percentage of Product Contribution to Profit and sales was declining sharply over the five-year period, especially for the last two years. That is because product E was in the maturity stage of its product life cycle. Its sales growth slows and even levels off. The new product D may influence product E’s performance as well.
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