CONTRADICTIONS IN THE INTERPRETATIONS OF THE PRODUCT LIFE CYCLE. PRODUCT LIFE CYCLE AS A BUSINESS MODEL

Abstract

Nowadays a new business model of high-tech enterprises is actively developing in the world economy – it is called “the business model of the product life cycle”. The important thing of product life cycle concept historical development is that since 1965 in the economy and the scientific environment there’s different interpretations of this term been formed. Most of these interpretations are not related to business modeling and, accordingly, cannot be used in commercial activity of the enterprise.

The concept of the product life cycle as a business model means that the customer does not purchase the product itself, but its guaranteed operation with the specified technical characteristics for a certain period. Consequently, the business is focused not only on the development and sale of the product, but also on the activities aimed at the successful use of the product in the customer's business: e.g., service maintenance, modernization, replacement with a newer device, etc.

In the article, the author conducts a historical analysis of the terns and concepts related to the product life cycle that have been formed from the mid-20th century to the present times. In conclusion the article notes the interpretation of the product life cycle that is the most relevant to current market conditions, when corporations are forced to transform their business model in order to maintain sustainable growth and rivalry.