Project Life Cycle
A project life cycle is the sequence of phases that a project goes through from initiation to closure. Projects are undertaken to produce a product, service, or result, and after delivering the output the project ceases to exist and the project life cycle ends.
A project life cycle has many phases, and each phase consists of activities from these process groups: initiation, planning, executing, monitoring and controlling, and closing. The phases are generally sequential and can overlap.
In the initiation phase, you develop the project charter and identify stakeholders.
The project management plan will be developed during the planning phase and you build the actual product in the execution phase.
Monitoring and controlling activities happen throughout the project, although these processes can overlap or repeat.
In closing, you hand over the product to the client and close the project.
Project life cycles are not necessarily a part of the product life cycle. If the project’s output is a service or result, it will not be a part of the product life cycle.
The PMBOK Guide defines the project life cycles in four phases:
- Starting the project
- Organizing and preparing
- Carrying out the project work
- Closing the project
The following are some characteristics of a project life cycle:
- Risks are higher when the project starts and decrease as the project progresses.
- Staff requirements are low at the beginning of the project, maximum during the execution, and afterward, may decrease.
- The cost of changes is lowest at the beginning of the project, and it starts increasing as the project moves further.
- Stakeholder influence is higher at the beginning of the project, and it starts decreasing as the project moves further.
- Most of the funds and time are spent during the execution phase.
Example
Suppose you have a project to build a new motorcycle.
First, you identify the stakeholders and collect the requirements. Once the requirements are collected, you will develop a plan to build the motorcycle.
Then you start the real work of building the motorcycle.
Finally, you will hand over this product to your client, and the project will be closed.
Product Life Cycle
The product life cycle describes the stages a product passes through from conception to retirement.
The stages of the product life cycle are development, introduction, growth, maturity, and retirement. These phases are sequential and do not overlap. The project life cycle can be a part of one or more phases in the product life cycle.
- In the development stage, you will generate the idea and create the product.
- The introduction stage is for marketing the product and starting to sell the product to customers.
- In the growth stage the sales increase.
- In the maturity stage, the product is accepted, and sales are at their peak.
- The last stage is the retirement stage. At this level, you will try to sell out all of your inventory and move on to the next product. This stage happens due to technical advancement or because your product is not selling enough to support its production cost.
- Please note that not all products reach the final stage; some are discarded and others never expire.
- Product life cycle phases have no duration limit, one phase can be longer than others. For example, the Toyota Corolla and Camry are old products and are still in the growth or maturity stage, and I do not see them coming under the retirement stage any time soon.
- A product life cycle can have many project life cycles. For example, the first project life cycle can be the development of the project, and the other, adding a function to the product.
- In most cases, the project life cycle is a subset of the product life cycle because the product life cycle continues even after the project is completed.
Example
Let’s consider the product life cycle for a new motorcycle that your company wants to launch.
The first step is idea generation. This includes a feasibility study, market research, and a business plan. Then you initiate a project to build this bike.
Once the motorcycle is ready, your project is complete and the project life cycle ends. However, the product life cycle continues. Now the next phase of the product life cycle begins, and that is selling and marketing the motorcycle.
You will provide after-sale support after selling, and finally, the retirement phase begins.
The retirement phase may include selling motorcycles at a discounted price.
During the product life cycle, if you add new functions to the product, you will create a new project for this process: for example, increasing the engine capacity of the motorcycle to support faster pickup.
The Differences Between the Project and Product Life Cycle
- A product life cycle can have single or multiple projects.
- The product life cycle is longer than the project life cycle.
- The project life cycle has a definite end while the product life cycle may not.
- The map for the product life cycle is conceptual and depends on market conditions while projects have predictive and well-defined roadmaps.
- The product life cycle phases do not overlap while the project phases may overlap.
- Phases generally occur only once in the product life cycle while in the project life cycle phases may repeat.
- Phases are sequential in the product life cycle, while in the project life cycle phases may or may not be sequential.
Basic Concept of Product and Project Lifecycle
A product life cycle is the length of time from a product first being introduced to consumers until it is removed from the market. A product’s life cycle is usually broken down into four stages; introduction, growth, maturity, and decline.
Product life cycles are used by management and marketing professionals to help determine advertising schedules, price points, expansion to new product markets, packaging redesigns, and more. These strategic methods of supporting a product are known as product life cycle management. They can also help determine when newer products are ready to push older ones from the market.
How Does it Work?
As mentioned above, there are four stages in a product’s life cycle - introduction, growth, maturity, and decline – but before this a product needs to go through design, research and development. Once a product is found to be feasible and potentially profitable it can be produced, promoted and sent out to the market. It is at this point that the product life cycle begins.
The various stages of a product’s life cycle determine how it is marketed to consumers. Successfully introducing a product to the market should see a rise in demand and popularity, pushing older products from the market. As the new product becomes established, the marketing efforts lessen and the associated costs of marketing and production drop. As the product moves from maturity to decline, so demand wanes and the product can be removed from the market, possibly to be replaced by a newer alternative.
Managing the four stages of the life cycle can help increase profitability and maximise returns, while a failure to do so could see a product fail to meet its potential and reduce its shelf life.
Writing in the Harvard Business Review in 1965, marketing professor Theodore Levitt declared that the innovator had the most to lose as many new products fail at the introductory stage of the product life cycle. These failures are particularly costly as they come after investment has already been made in research, development and production. Because of this, many businesses avoid genuine innovation in favour of waiting for someone else to develop a successful product before cloning it.
Stages
1. Market Introduction and Development
This product life cycle stage involves developing a market strategy, usually through an investment in advertising and marketing to make consumers aware of the product and its benefits.
At this stage, sales tend to be slow as demand is created. This stage can take time to move through, depending on the complexity of the product, how new and innovative it is, how it suits customer needs and whether there is any competition in the marketplace. A new product development that is suited to customer needs is more likely to succeed, but there is plenty of evidence that products can fail at this point, meaning that stage two is never reached. For this reason, many companies prefer to follow in the footsteps of an innovative pioneer, improving an existing product and releasing their own version.
2. Market Growth
If a product successfully navigates through the market introduction it is ready to enter the growth stage of the life cycle. This should see growing demand promote an increase in production and the product becoming more widely available.
The steady growth of the market introduction and development stage now turns into a sharp upturn as the product takes off. At this point competitors may enter the market with their own versions of your product – either direct copies or with some improvements. Branding becomes important to maintain your position in the marketplace as the consumer is given a choice to go elsewhere. Product pricing and availability in the marketplace become important factors to continue driving sales in the face of increasing competition. At this point the life cycle moves to stage three; market maturity.
3. Market Maturity
At this point a product is established in the marketplace and so the cost of producing and marketing the existing product will decline. As the product life cycle reaches this mature stage there are the beginnings of market saturation. Many consumers will now have bought the product and competitors will be established, meaning that branding, price and product differentiation becomes even more important to maintain a market share. Retailers will not seek to promote your product as they may have done in stage one, but will instead become stockists and order takers.
4. Market Decline
Eventually, as competition continues to rise, with other companies seeking to emulate your success with additional product features or lower prices, so the life cycle will go into decline. Decline can also be caused by new innovations that supersede your existing product, such as horse-drawn carriages going out of fashion as the automobile took over.
Many companies will begin to move onto different ventures as market saturation means there is no longer any profit to be gained. Of course, some companies will survive the decline and may continue to offer the product but production is likely to be on a smaller scale and prices and profit margins may become depressed. Consumers may also turn away from a product in favour of a new alternative, although this can be reversed in some instances with styles and fashions coming back into play to revive interest in an older product.
Product Life Cycle Strategy and Management
Having a properly managed product life cycle strategy can help extend the life cycle of your product in the market.
The strategy begins right at the market introduction stage with setting of pricing. Options include ‘price skimming,’ where the initial price is set high and then lowered in order to ‘skim’ consumer groups as the market grows. Alternatively, you can opt for price penetration, setting the price low to reach as much of the market as quickly as possible before increasing the price once established.
Product advertising and packaging are equally important in order to appeal to the target market. In addition, it is important to market your product to new demographics in order to grow your revenue stream.
Products may also become redundant or need to be pivoted to meet changing demands. An example of this is Netflix, who moved from a DVD rental delivery model to subscription streaming.
Understanding the product life cycle allows you to keep reinventing and innovating with an existing product (like the iPhone) to reinvigorate demand and elongate the product’s market life.
Examples
Many products or brands have gone into decline as consumer needs change or new innovations are introduced. Some industries operate in several stages of the product life cycle simultaneously, such as with televisual entertainment, where flat screen TVs are at the mature phase, on-demand programming is in the growth stage, DVDs are in decline and video cassettes are now largely redundant. Many of the most successful products in the world stay at the mature stage for as long as possible, with small updates and redesigns along with renewed marketing to keep them in the thoughts of consumers, such as with the Apple iPhone.
Here are a few well-known examples of products that have passed or are passing through the product life cycle:
- Typewriters - The typewriter was hugely popular following its introduction in the late 19th century due to the way it made writing easier and more efficient. Quickly moving through market growth to maturity, the typewriter began to go into decline with the advent of the electronic word processor and then computers, laptops and smartphones. While there are still typewriters available, the product is now at the end of its decline phase with few sales and little demand. Meanwhile, desktop computers, laptops, smartphones and tablets are all experiencing the growth or maturity phases of the product lifecycle.
- Video Cassette Recorders (VCRs) - Having first appeared as a relatively expensive product, VCRs experienced large-scale product growth as prices reduced leading to market maturation when they could be found in many homes. However, the creation of DVDs and then more recently streaming services, VCRs are now effectively obsolete. Once a ground-breaking product VCRs are now deep in a decline stage from which it seems unlikely they will ever recover.
- Electric Vehicles - Electric vehicles are experiencing a growth stage in their product life cycle as companies work to push them into the marketplace with continued design improvements. Although electric vehicles are not new, the consistent innovation in the market and the improving sales potential means that they are still growing and not yet into the mature phase.
- AI Products - Like electric vehicles, artificial intelligence (AI) has been in development and use for years, but due to the continued developments in AI, there are many products that are still in the market introduction stage of the product life cycle. These include innovations that are still being developed, such as autonomous vehicles, which are yet to be adopted by consumers.
Project Life Cycle Definition
Project life cycle is a workflow of activities defined in the systematic ways to gain maximum benefits from business project. A project stands out for its life cycle, which is usually presented as consisting of phases. The number of phases and their designation may vary from one application to another, from one application area to another and from one author to another.
The project engineer will sometimes define the phases of the project under its responsibility by taking account of parameters specific to the project or the company culture. Project plan may keep on changing depending on the complexity, budget and size of the project. These differences limit in any way valid and relevance of the model. But when we are discussing about business project management, it is highly recommended that an engineer should follow the below four phases of the business project life cycle structure in any type of project model. With you follow the proper project model, it will benefit you in many ways. For example: It will help to project goals and objects appropriately; It will help you to give clear picture to promoters and stakeholders; Also it will help you to balance project quality, scope, cost and resources. Finally, this would lead you towards successful project with implementing successful project plans.
Project Life Cycle Stages
Let us understand about various stages involved in project life cycle when we are discussing about business project management. Below listed are the stages and phases of project life cycle.
1. Identification Phase
This is the first stage of project life cycle. It is also known as initiation phase. In this stage project objectives are identified and requirements are clarified. Apart from this, business opportunities, business problems and business needs are discussed. Further investigation is done to find the feasibility. After doing all the studies final recommendations are been addressed whether we can do this project or not? Or whether this project is profitable or not?
Once project is been approved, hiring of employees and managers are conducted. Team are built to deliver the business project. Finally detailed planning is been performed on the project by key members of the projects. Here comes the next stage of project which is planning.
2. Planning Phase
In project planning phase, scope of the project is defined more accurately. Once the project team is been finalized and work is been identified, schedules of deliverables and estimated cost are been figured out. Detailed planning is established for its duration; timelines, resources and expenditures, as well as policies and management procedures.
In planning stage, it is a good time to identify possible risk and prepare the risk management strategies. Further you can create a communication plan for project stakeholders describing risks, planning, scope and delivery timelines. Finally after drafting and presenting project plan, acceptance plan is been prepared by project managers. It is assumed that all the project planning activities are been completed and now project is ready to move to next phase of implementation.
3. Implementation, Monitoring and Controlling Phase
This is the third stage of project life cycle. In this phase product or service is actually carried out according to plan and in accordance with the applicant’s requirements. Project managers keep close watch on implementation activities, since this is one of the important stages of life cycle. During this stage, team carry-on with task assigned to them and daily status report is been presented to management to track the activities and schedule of the activities. Apart from this stakeholder are also been communicated on the activities on regular basis.
Status report should highlight key points in it. For example: activities performed, schedules, cost and quality of the product. Before delivering the project, quality and control measures are closely monitored and reviewed against acceptance plan. One deliverables are presented and accepted by the customer or a client, project moves to final stage of closing activities.
4. Closure Phase
This is the final stage of project life cycle. In this stage product or service is been delivered to customer or a client for evaluation. Project documentations like user manuals and other documents are been handed over to the client. All key members and stakeholders are been communicated regarding closure of the project. Lastly, documentation of lessons learn is been prepared by team members for the purpose of examinations and self-learning for the future projects.
Apart from this, there are various different project life cycle stages and phases based on different project according to its areas, such as construction, academic research and software engineering. But this project life cycle is the common procedure followed across many industries.
