The final discussion
prompt for this week was to consider how product development has been affected
by shorter product lifecycles and how technology has affected product development. I stumbled on a website article that claimed
50% of annual company revenues across a variety of industries come from new
products that are less than 3 years old (link below).
That’s amazing, as it means that the Maturity stage in the graph below
is a relatively short time frame.
Companies are then not able to harvest profits for an extended period of
time. Product development must be
focused on continual innovation to survive then.
I would think this makes
it much more critical to keep development costs under control. As the article mentions, forecasting is huge
for demand because decisions to move forward have to be made quickly. If a company takes too long to launch the
product, someone else will capture the market first. Thus, I think product development timelines have
probably decreased on average. I think
technology helps firms meet the accelerated timelines though. Better manufacturing technology, supply
chains, and logistics can counter some of the shorter lifecycles and allow
companies to meet time-to-market challenges.
An example that crossed
my mind is the movie industry. I think
they can predict the total gross revenue from a movie fairly accurately now
just from the first two or three days’ ticket sales. Movies are basically following an extremely
condensed version of the product life cycle graph below. The growth, maturity, and decline stages
happen within a span of 3 weeks now. I
can remember 20 years ago a blockbuster would stay in theaters for a whole
summer. Nowadays if I can’t catch the
movie in the first 3 weeks, it’s hardly playing anywhere. I’m not sure there is as much impact to the
product development stage for the industry compared to tangible products, but
it does seem that trilogies have gone from every 3-4 years between movies (original
Star Wars) to every other year (Hunger Games or Lord of the Rings as examples). This probably has a lot to do with making sure the actors cast do not change so much in appearance.
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