On The Turning Point Of The Product Life Cycle

Nowadays, with the rapid development of economy, every enterprise faces fierce competition. What enterprises should do in order to deal with these problems? If they can predict the coming turning point, and make a decision to quit or hold their ground decidedly, the huge risk can be avoided.This paper, based on the theory of"warning the turning point of the product life cycle", firstly introduces six pre-indicators which can be used to warn the turning point and their inherent logistic relations. Secondly, the paper explains reasons why these indicators can be used to predict the turning point. Combining with the air condition industry, the author demonstrates the prediction in air condition industry, identifies the turning point and its inevitability, and then concludes four conclusions combining with"price rival": cutting down the price doesn't mean the turning point which usually comes later is coming; price rival initiated by leading competitors is the real rival, which means the industry has reached the turning point; when both the inventory turnover and the accountant receivable turnover decline persistently, and the other indicators occurs previously, the price is declining, but the whole industry's price will decline later; when the inventory turnover rises but the accountant receivable turnover doesn't turns rapidly, the real price declining is coming. Finally, this paper analyses and predicts the steel industry briefly.