Product Life Cycle Examples

The standard product life cycle depiction is idealized vision and is not always observed in practice. Here we will examine several examples and tie the industry back to change in the environment and the strategic options for the firm.

Example 1: United States Coal Production (in the decline phase since about 2000)

Charts 1 and 2 respectively show United States coal production (in millions of short tons) and in millions of short per capita. These charts show long run production from 1850 through 2017. Data is not available for all years. Examining two charts, especially the per capita chart, allow us to disentangle product revenue or unit growth numbers from population growth. Both charts present a similar pattern. Coal production exhibited growth from 1850 through the end of the 20th century. The 21st century shows a decline in United States coal production.

Simple liner regression models were constructed to identify trends. These models are not forecasting models. Separate model for 1850 – 1950 and the 1951 – 1999 periods indicate significant growth in United States coal production. The per capita model for 1850 – 1950 does not show significant growth.

Both of the models for the 2000 – 2017 time period show a significant decline show in the United States coal production. Short ton production of coal if declined by 17.224 million tons per year.

Major takeaway points: United States cola production, both in the aggregate and per capita experienced a century long introduction and growth phase. The 21st century witnesses the onset of the product moving into the decline phase.