Introduction – Product Life Cycle
Products and services have life cycles. The product life cycle refers to the period
from the product’s first launch into the market until its final withdrawal and it is split
up in different phases. During this period significant changes are made in the way that the
product is behaving into the market i.e. its reflection in respect of sales to the
company that introduced it into the market. Since an increase in profits is the major
goal of a company that introduces a product into a market, the product’s life cycle
management is very important. The understanding of a product’s life cycle helps a company to understand and realize when it is time to introduce and withdraw a product from a market, its position in the market compared to competitors, and the product’s success or failure.
Verizon Communications
Verizon Communications has established itself as the major seller of local phone service, its core business. However, over the past few years, local phone service revenues have been through the product life cycle and have declined as a result of substitute products, such as mobile phones, and Voice over IP (VoIP). Network owners are racing to build out broadband networks, over which they can provide integrated bundles of voice, video, and data services. The company that can provide systems with richer functionality at faster speeds and lower cost in order to meet constantly evolving market demands will win the race. Verizon Communications is changing rapidly as cable companies are introducing VoIP telephony services and eroding the fixed line phone business, a core of Verizon’s operations. As fixed line revenues continue to decline, Verizon is faced with a tricky balancing act of having to reinv ...