A company has recently launched a new product in the market. Initially, it faced slow sales growth, limited markets, and high prices. However, over…

CA Intermediate · Financial Management and Strategic Management · RTP · September 2024
A company has recently launched a new product in the market. Initially, it faced slow sales growth, limited markets, and high prices. However, over time, the demand for the product expanded rapidly, prices fell, and competition increased. Identify the stages of the product life cycle (PLC) that the company went through.

Suggested Answer and Working Notes:

The company went through the following stages of the product life cycle (PLC): Introduction stage: Initially, the company faced slow sales growth, limited markets, and high prices, which are characteristic of the introduction stage. During this stage, competition is almost negligible, and customers have limited knowledge about the product. Growth stage: Over time, the demand for the product expanded rapidly, prices fell, and competition increased. These are typical features of the growth stage in the PLC. In this stage, the product gains market acceptance, and customers become more aware of the product's benefits and show interest in purchasing it.

Topics: Part-A: Financial Management

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