Sub: Management Topic: OperationsManagement
Question:
Identify the product life cycle stages in company?
ClassOf1 provides exert guidance for College, Graduate and High school homework and live online tutoring on subjects like
Finance, Marketing, Statistics, Economics and others. Check out more solved problems in our Solution Library.
How did the company change their operations strategies during the different stages?
Discuss the changes in the OM decisions for each stage?
Solution:
Product Life Cycle stages in the company – Below is the product life cycles that any
product goes through from the time it is introduced till and till the time the company
stops producing it as it is no longer profitable.
www.classof1.com
*The Homework solutions from ClassOf1 are intended to help the student understand the approach to solving the problem and not for submitting
the same in lieu of your academic submissions for grades.

Sub: Management Topic: OperationsManagement
As can be seen in the figure above, when a product is introduced, the volumes
are low with sales coming from the early adopters, then there is a period of high volume
growth. This is followed by steady by consistent volumes in the maturity stage before
volumes drop as newer products are introduced and this product is gradually pushed
into retirement in the decline stage. For a successful company, it has to have as many
products in the growth and maturity stage as possible as that is the region where there
is maximum profits and revenues.
For a company in the hi-tech hardware industry like Dell, technology keeps
changing very regularly which means that products and components have very short life
cycles. Therefore proper management of the product life cycle and constantly keep
introducing new products is one of the keys to remain competitive in this industry.
Below we discuss how Dell manages the products in each of the product life
cycle stages
a. Introduction – This is a time when the product has been introduced and volumes
are low. However since the product technology is new at this point, the
components maybe on long lead times that affect the delivery schedules of the
system. At this time, the most important thing for Dell would be top correctly
estimate the new components needed so that these new systems are not on too
long a lead time.
b. Growth – This is time where the volume growth takes place very fast. So the
challenge for Dell would be to work closely with its suppliers to ensure that no
they are in a position to supply these parts and ensure that the supply chain isn’t
affected due to parts shortage.
c. Maturity – This is the time when there are huge volumes but the profits are
lower as competitors have also come up with similar products. Also demand is
more predictable than in the previous two stages. Here Dell should work to
lower the per unit costs of the components as there is price competition and also
ensure that it has proper supply as well.
www.classof1.com
*The Homework solutions from ClassOf1 are intended to help the student understand the approach to solving the problem and not for submitting
the same in lieu of your academic submissions for grades.

Sub: Management Topic: OperationsManagement
d. Decline – This is the stage where the product’s sales would be dipping and Dell
would soon need to stop producing this product. The decision that Dell would
need to take at this stag would be to ensure that prices of components are at
their lowest as this is old technology. Dell would also need to plan for this stage
in advance so that other parts of the sales/supply chain are not affected when
Dell stops production of that product.
** End of the Solution **
ClassOf1 provides exert guidance for College, Graduate and High school homework and live online tutoring on subjects like
Finance, Marketing, Statistics, Economics and others. Check out more solved problems in our Solution Library.
www.classof1.com
*The Homework solutions from ClassOf1 are intended to help the student understand the approach to solving the problem and not for submitting
the same in lieu of your academic submissions for grades.