Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 27

Investment Centers; The Sales Life Cycle (Review of Chapter 18) The sales life cycle is used to describe the phases a product goes through from introduction to withdrawal from the market. The four phases are: (a) introduction, (b) growth, (c) maturity, and (d) decline and withdrawal.

In the introduction phase, the firm relies on product differentiation to attract new customers to the product. In the growth phase, the product attracts competition, although differentiation is still an advantage for the firm. In the maturity phase, competition is keen, and cost control and quality considerations become important. In the final phase, differentiation again becomes important as do cost control and quality (see Chapter 13 and Chapter 18 for more detail).

Required At which phases of the sales life cycle, if any, should investment-center evaluation methods be used, and why?

Step 1 of 2

The primary goal of most of the business organization is to maximize profit. Now, managers have different approach and strategies to achieve this goal. It is necessary to have timely and periodic evaluation of the financial performance of the decisions taken by these managers. It helps is knowing the mistakes made and make changes that are needed.