Free Essay

Industry Life Cycle

In: Business and Management

Submitted By lixwh1
Words 3012
Pages 13
Industry Life Cycle

Evidence on entry, exit, firm survival, innovation and firm structure in new industries is reviewed to assess whether industries proceed through regular cycles as they age. A leading depiction of the evolution of new industries, the product life cycle, is used to organize the evidence it is shown that the product life cycle captures the way many industries evolve through their formative eras, but regular patterns occur when industries are mature that are not predicted by the product life cycle. Regularities in entry, exit, firm survival and firm structure are also developed for industries whose evolution departs significantly from the product life cycle.

Definition of 'Industry Lifecycle'
A concept relating to the different stages an industry will go through, from the first product entry to its eventual decline. There are typically five stages in the industry lifecycle. They are defined as:
i. Early Stages Phase - alternative product design and positioning, establishing the range and boundaries of the industry itself.
Ii.Inovation Phase - Product innovation declines, process innovation begins and a "dominant design" will arrive. iii. Cost or Shakeout Phase - Companies settle on the "dominant design"; economies of scale are achieved, forcing smaller players to be acquired or exit altogether. Barriers to entry become very high, as large-scale consolidation occurs. iv. Maturity - Growth is no longer the main focus, market share and cash flow become the primary goals of the companies left in the space.
v. Decline - Revenues declining; the industry as a whole may be supplanted by a new one.
Industry Life Cycle Analysis
A form of fundamental analysis involving the process of making investment decisions based on the different stages an industry is at during a given point in time. The type of position taken will depend on firm specific characteristics, as well as where the industry is at in its life cycle.
Under the production and market introduction phases, revenues and earnings are likely to be very low, which makes investments during these phases more speculative in nature. Revenues and earnings are likely to be low because there is little demand for the product, or the product is not completed. Expenses are likely to be very large during these phases as a company or industry spends a lot on marketing and research.

Through the growth phase, revenues and margins are likely to be on the rise due to an increase in demand for a product and the pricing power the firm has due to a small number of competitors. Stock prices are likely to rise during this phase.

During the maturity and stability phase, revenues and margins are likely to decline due to lower sales demand and more competition. Stock prices are likely to decline during these phases.

Life cycle models are not just a phenomenon of the life sciences. Industries experience a similar cycle of life. Just as a person is born, grows, matures, and eventually experiences decline and ultimately death, so too do industries and product lines. The stages are the same for all industries, yet every industry will experience these stages differently, they will last longer for some and pass quickly for others. Even within the same industry, various firms may be at different life cycle stages. A firms strategic plan is likely to be greatly influenced by the stage in the life cycle at which the firm finds itself. Some companies or even industries find new uses for declining products, thus extending their life cycle.
The growth of an industry's sales over time is used to chart the life cycle. The distinct stages of an industry life cycle are: introduction, growth, maturity, and decline. Sales typically begin slowly at the introduction phase, then take off rapidly during the growth phase. After leveling out at maturity, sales then begin a gradual decline. In contrast, profits generally continue to increase throughout the life cycle, as companies in an industry take advantage of expertise and economies of scale and scope to reduce unit costs over time
In the introduction stage of the life cycle, an industry is in its infancy. Perhaps a new, unique product offering has been developed and patented, thus beginning a new industry. Some analysts even add an embryonic stage before introduction. At the introduction stage, the firm may be alone in the industry. It may be a small entrepreneurial company or a proven company which used research and development funds and expertise to develop something new. Marketing refers to new product offerings in a new industry as "question marks" because the success of the product and the life of the industry is unproven and unknown.
A firm will use a focused strategy at this stage to stress the uniqueness of the new product or service to a small group of customers. These customers are typically referred to in the marketing literature as the "innovators" and "early adopters." Marketing tactics during this stage are intended to explain the product and its uses to consumers and thus create awareness for the product and the industry. According to research by Hitt, Ireland, and Hoskisson, firms establish a niche for dominance within an industry during this phase. For example, they often attempt to establish early perceptions of product quality, technological superiority, or advantageous relationships with vendors within the supply chain to develop a competitive advantage.
Because it costs money to create a new product offering, develop and test prototypes, and market the product, the firm's and the industries profits are usually negative at this stage. Any profits generated are typically reinvested into the company to solidify its position and help fund continued growth. Introduction requires a significant cash outlay to continue to promote and differentiate the offering and expand the production flow from a job shop to possibly a batch flow. Market demand will grow from the introduction, and as the life cycle curve experiences growth at an increasing rate, the industry is said to be entering the growth stage. Firms may also cluster together in close proximity during the early stages of the industry life cycle to have access to key materials or technological expertise, as in the case of the U.S. Silicon Valley computer chip manufacturers.
Like the introduction stage, the growth stage also requires a significant amount of capital. The goal of marketing efforts at this stage is to differentiate a firm's offerings from other competitors within the industry. Thus the growth stage requires funds to launch a newly focused marketing campaign as well as funds for continued investment in property, plant, and equipment to facilitate the growth required by the market demands. However, the industry is experiencing more product standardization at this stage, which may encourage economies of scale and facilitate development of a line-flow layout for production efficiency.
Research and development funds will be needed to make changes to the product or services to better reflect customers' needs and suggestions. In this stage, if the firm is successful in the market, growing demand will create sales growth. Earnings and accompanying assets will also grow and profits will be positive for the firms. Marketing often refers to products at the growth stage as "stars." These products have high growth and market share. The key issue in this stage is market rivalry. Because there is industry-wide acceptance of the product, more new entrants join the industry and more intense competition results.
The duration of the growth stage, as all the other stages, depends on the particular industry or product line under study. Some items—like fad clothing, for example—may experience a very short growth stage and move almost immediately into the next stages of maturity and decline. A hot toy this holiday season may be nonexistent or relegated to the back shelves of a deep-discounter the following year. Because many new product introductions fail, the growth stage may be short or nonexistent for some products. However, for other products the growth stage may be longer due to frequent product upgrades and enhancements that forestall movement into maturity. The computer industry today is an example of an industry with a long growth stage due to upgrades in hardware, services, and add-on products and features.
During the growth stage, the life cycle curve is very steep, indicating fast growth. Firms tend to spread out geographically during this stage of the life cycle and continue to disperse during the maturity and decline stages. As an example, the automobile industry in the United States was initially concentrated in the Detroit area and surrounding cities. Today, as the industry has matured, automobile manufacturers are spread throughout the country and internationally.
As the industry approaches maturity, the industry life cycle curve becomes noticeably flatter, indicating slowing growth. Some experts have labeled an additional stage, called expansion, between growth and maturity. While sales are expanding and earnings are growing from these "cash cow" products, the rate has slowed from the growth stage. In fact, the rate of sales expansion is typically equal to the growth rate of the economy.
Some competition from late entrants will be apparent, and these new entrants will try to steal market share from existing products. Thus, the marketing effort must remain strong and must stress the unique features of the product or the firm to continue to differentiate a firm's offerings from industry competitors. Firms may compete on quality to separate their product from other lower-cost offerings, or conversely the firm may try a low-cost/low-price strategy to increase the volume of sales and make profits from inventory turnover. A firm at this stage may have excess cash to pay dividends to shareholders. But in mature industries, there are usually fewer firms, and those that survive will be larger and more dominant. While innovations continue they are not as radical as before and may be only a change in color or formulation to stress "new" or "improved" to consumers. Laundry detergents are examples of mature products.
Declines are almost inevitable in an industry. If product innovation has not kept pace with other competing products and/or service, or if new innovations or technological changes have caused the industry to become obsolete, sales suffer and the life cycle experiences a decline. In this phase, sales are decreasing at an accelerating rate. This is often accompanied by another, larger shake-out in the industry as competitors who did not leave during the maturity stage now exit the industry. Yet some firms will remain to compete in the smaller market. Mergers and consolidations will also be the norm as firms try other strategies to continue to be competitive or grow through acquisition and/or diversification.
Management efficiency can help to prolong the maturity stage of the life cycle. Production improvements, like just-in-time methods and lean manufacturing, can result in extra profits. Technology, automation, and linking suppliers and customers in a tight supply chain are also methods to improve efficiency.
New uses of a product can also revitalize an old brand. A prime example is Arm & Hammer baking soda. In 1969, sales were dropping due to the introduction of packaged foods with baking soda as an added ingredient and an overall decline in home baking. New uses for the product as a deodorizer for refrigerators and later as a laundry additive, toothpaste additive, and carpet freshener extended the life cycle of the baking soda industry. Promoting new uses for old brands can increase sales by increasing usage frequency. In some cases, this strategy is cheaper than trying to convert new users in a mature market.
To extend the growth phase as well as industry profits, firms approaching maturity can pursue expansion into other countries and new markets. Expansion into another geographic region is an effective response to declining demand. Because organizations have control over internal factors and can often influence external factors, the life cycle does not have to end.
An example is feminine hygiene products. Sales in the United States have reached maturity due to a number of external reasons, like the stable to declining population growth rate and the aging of the baby boomers, who may no longer be consumers for these products. But when makers of these products concentrated on foreign markets, sales grew and the maturity of the product was prolonged. Often so-called "dog" products can find new life in other parts of the world. However, once world saturation is reached, the eventual maturity and decline of the industry or product line will result.
Just as industries experience life cycles, studies have documented life cycles in many other areas. Countries have life cycles, for example, and we traditionally classify them as ranging from the First World countries to Third World or developing countries, depending on their levels of capital, technological change, infrastructure, or stability. Products also experience life cycles. Even within an industry, various individual companies may be at different life cycle stages depending upon when they entered the industry. The life cycle phenomenon is an important and universally accepted concept to help managers better understand sales growth and change over time.

One of the main tenets of how firms and industries evolve is that, as some businesses mature, the basis of competition shifts from product innovation to process innovation (Utterback and Abernathy 1975; Utterback and Suarez 1993; Utterback 1994; Klepper 1996), For example, the model initially proposed by Utterback and Abernathy in 1975, holds that, early after the birth of a new industry, firms compete based upon product differentiation, investing heavily in developing new product features and determining what consumers want. But, as the market matures and customer needs become more defined, firms may shift their focus to competing on cost and economies of scale, investing more heavily in manufacturing and other processes in order to make production operations more specialized and efficient. This product-process lifecycle model does not hold for all industries or firms; it seems to apply more to manufacturing settings where “dominant designs” or product standards emerge, and where competition then shifts to price (Utterback 1994). Sometimes a technological discontinuity interrupts this maturation process and the cycle starts over again . In addition, as we have seen in industries such as automobiles, some firms may focus on process innovation as a source of competitive advantage (for example, Toyota) while other firms choose a different strategy and continue to focus on design innovation (for example, BMW). Nonetheless, this stylized lifecycle model has become an important framework in management literature to help us think about what strategies and investments companies should emphasize at different periods in their evolution and in different competitive environments.

Based on recent research, we argue in this paper that the product-process lifecycle model is incomplete in that we see an increasing number of firms in many industries that seem to move on to an additional, third phase: a period where their emphasis, as indicated by the major source of revenues or profits or both, shifts to services. Figure 1 reflects our proposal; we have added a services curve (dotted line) to the well-known products- process curves originally proposed by Utterback and Abernathy (1975). Much of the evidence to support our claim comes from studies conducted after the original industry lifecycle theory was proposed in an area of research known as “service management”. Several authors in this area of research have noted the increasing importance of the service sector in most industrialized nations . Others have looked at the advantages of focusing on services and the differences between service firms and manufacturing firms . However, to our knowledge, no author so far has explicitly linked the emergence of services to the industry lifecycle.

Shifting a firm’s strategic focus due to changes in the environment can be a major challenge but also have important competitive benefits. For instance, a successful ransition from products to processes requires firms to change their organizational structure and acquire new capabilities (Utterback and Abernathy, 1978). At the same time, a successful shift from a focus on product innovation to process innovation appears to affect firm survival (Suarez & Utterback, 1995). Likewise, an additional shift towards services suggests that, as an industry matures, firms cannot simply focus on cost-base competition as prevailing lifecycle theories suggest. Maintaining low costs through efficient processes is still important in the proposed third phase of the industry lifecycle, but companies might also want to acquire service-related capabilities, particularly if these become important to competition and feed directly into an enhanced business model that includes service revenues. IBM, for example, targeted services under new CEO Lou Gerster and then saw this part of its business rise from 23 percent of revenues in 1992 to 52 percent in 2005. The story of IBM is particularly well-known, but it is only one of an increasing number of examples in computer software and hardware as well as other industries (IBM, 2005).In line with previous research, attempting a transformation from processes to services seems to be challenging as well, as the new capabilities in services often differ significantly from traditional production capabilities .

Proponents of services have considered the rise of services as an overall trend in the economy. The advent of the post-industrial economy has resulted in an increased importance of services in most sectors of the economy over time, even in manufacturing sectors (Quinn, 1992). Services are increasingly representing a larger proportion of gross domestic product in all advanced economies. While this general trend is indisputable, we argue here that the role of services within an industry can be better understood by applying the lenses of industry lifecycle (Abernathy & Utterback, 1978). Industry lifecycle theory has long postulated that industries evolve through distinct phases and that each phase is associated with different basis of competition at the firm level. However, the industry lifecycle literature has focused on products and processes and has largely ignored services. Introducing services into the industry lifecycle model requires an understanding of how services relate to the different stages of industry evolution, and to potential shifts in the basis of competition as an industry evolves.

Similar Documents

Premium Essay

Industry Life Cycle

...Industry Life Cycle Paula Baldridge Midway College BUS 411 August 24, 2014 Dr. Marla Ashe Abstract The purpose of this summary is to understand the concept of the industry life cycle and explore the implications in the process of designing business strategies. The authors of the article “GRA Decision Making Model for the Integrated Strategies of Life Cycle with Industrial Value Chain” familiarizes readers with evaluation models and analysis that has contributed to the development of business strategies fitted to the industry life cycle. Key words: industry life cycle, business strategies What is industry life cycle? Industry life cycle is stages (introduction, growth, shakeout, maturity, and decline) through which industries are believed to pass (Parnell, 2014). In this article, the authors use the concept of industry life cycle with the industrial value chain to propose an evaluation model to develop integrated strategies. The analytic hierarchic process and grey relational analysis is what forms the model can help decision makers to assess their integration strategies. Because of the competitive environment it is a necessary strategy for survival and development. For organizations to have successful business strategies they must be aware of where the industry stands in the industry life cycle. According to Huang, Chu & Chen, (2009) The AHP and GRA based decision-making model to construct an evaluation method can provide decision makers in PC......

Words: 449 - Pages: 2

Free Essay

Investments : Industry Life Cycle

...Jorge Porres August 18, 2013 Investments Keiser University Week 3 Essays 1. Industry Life Cycle: Discuss the industry life cycle, how this concept can be used by security analysts, and the limitations of this concept for security analysis. The industry life cycle is made up of five stages: 1. Pioneer phase: This face is characterized by the high cost of production and the low demand of the product by the market. Mostly made up of start-ups. 2. Growth phase: When sales start to grow thanks to little competition. 3. Mature Growth phase: Companies begin to be affected by competition and as a result profit margins begin to diminish. 4. Stabilization /Maturity phase: this is typically the longest phase an industry will go thru, it is still affected by competition and starts growing by an average of the now fully created industry. 5. Deceleration / Decline phase: the falls in demand do to innovation in other products from other companies or industries. This life cycle can be effective to security analysis or to investors because they know when it is wise to invest, knowing that a company will grow, so will its market cap. It is not always 100% effective do that it is difficult to know when innovation will strike and one may not be prepared for the deceleration or decline phase. 2. P/E Ratio: The price/earnings ratio, or multiplier approach, may be used for stock valuation. Explain this process and describe how the "multiplier" varies from the one......

Words: 527 - Pages: 3

Free Essay


...3 Case study on Plastics : PET Bottle Life Cycle of Plastics Crude Oil Polymer Product Use Waste Recovery Polymer Product Use Overview of PET bottle recycling Containers and Packaging Recycling Law Specified business entities Fiber Industry (wash, crash, melt, spin) Bottle Industry Obligation to recycle Local governments (deporimerization) Consumers Selective collection and storage Selective discarding Players Producers n n n n Plant designers Product designers Energy suppliers Related industrial sectors Consumers Municipal and governmental authorities Waste treatment agencies Role of KIH ‘configuration engine’ To inform players of their role in life cycle as a stakeholder To accumulate knowledge/information of life cycle from information suppliers To interpret massive life cycle data with transparency for rational decision making 1. 2. 3. Overview of PET bottle recycling Containers and Packaging Recycling Law Specified business entities Fiber Industry (wash, crash, melt, spin) Bottle Industry Obligation to recycle Local governments (deporimerization) Consumers Selective collection and storage Selective discarding Objective of this case study To develop a ‘configuration engine’, which takes LCA as an environmental metric concurrently with an economic metric, for chemical process designer, To clarify steps, tools and information in a form of business-model. To show actual......

Words: 1378 - Pages: 6

Free Essay

Starch Products

...Life Cycle Assessment study of starch products for the European starch industry association (AAF): sector study Vercalsteren An, Dils Evelien, Boonen Katrien Study accomplished under the authority of the European starch industry association (AAF) 2011/TEM/R/104 August 2012 All rights, amongst which the copyright, on the materials described in this document rest with the Flemish Institute for Technological Research NV (“VITO”), Boeretang 200, BE-2400 Mol, Register of Legal Entities VAT BE 0244.195.916. Table of Contents TABLE OF CONTENTS Table of Contents ________________________________________________________________ 3 List of Figures ___________________________________________________________________ 4 List of Tables ____________________________________________________________________ 5 CHAPTER 1 CHAPTER 2 2.1. 2.2. 2.3. Introduction ________________________________________________________ 7 Definition of goal and scope ___________________________________________ 9 9 9 10 Introduction Goal definition Scope definition CHAPTER 3 CHAPTER 4 4.1. Life cycle data inventory _____________________________________________ 15 life cycle impact assessment __________________________________________ 19 19 LCIA methodology 4.2. Environmental profiles of starch products 20 4.2.1. Environmental profile of native starches _________________________________ 20 4.2.2. Environmental profile of liquid glucose (including Glucose and Fructose syrups) __ 20 4.3. Carbon...

Words: 6841 - Pages: 28

Premium Essay

Life Cycle Analysis of Milk

...vitamins A, B & D. The history of milk began in the Neolithic age (the new stone age), a time when humans started the transition from hunting and gathering to a more settled way of life. Life Cycle of Milk Supply Chain: Environmental and societal impact of Milk; The dairy industry poses a number of challenges to the health of the environment- * Methane emission- this is release from cows’ during the digestion process either by belching or flatulence. Statistics vary on how much methane an average dairy cow expels on a daily basis. Some experts say 100 liters to 200 liters, while others say it's up to 500 liters a day. This amount of methane is comparable to pollution expelled by a vehicle * Carbon emission- according to studies carried out by the U.S dairy carbon footprint study, it showed that carbon footprint of a gallon of milk is approximately 17.6 pounds of carbon dioxide equivalents. This will usually occur during milk freight and distribution. * Water pollution-Disposal of organic wastes without treatment leads to pollution of water resources hence, causing a rapid growth of microscopic algae that kill fishes and other aquatic life. Furthermore, ammonia released from manure can lease to acid rain causing environmental harm. * Land conversion - The dairy industry is also responsible for majority of land conversion, particularly in the tropics, to grow the feed...

Words: 409 - Pages: 2

Premium Essay

Adm Processor

...Abstract The AMD Fusion Family of Accelerated Processing Units (APUs), introduced to market in January 2011, is a new generation of processors that combines the computing processing unit (CPU) and graphics processing unit (GPU) capabilities in a single chip (die). APU-based platforms can deliver a prodigious amount of computational horsepower, and can present enormous opportunities in developing an application ecosystem beyond today’s mainstream computer systems. While APUs seek to deliver a superior, immersive PC experience, they also can provide tangible environmental benefits. By eliminating a chip to chip link and by introducing new holistic power management techniques, the APUs are designed to be more power efficient than current generation platforms that have both computational and graphical capabilities. This paper compares the environmental impact of one of AMD’s first APU products against an equivalent computer platform powered by the current generation of AMD processors (CPUs and GPUs). By conducting a business to consumer (B2C) lifecycle assessment, this study compares the total lifecycle greenhouse gas (GHG) emissions (also known as a “carbon footprint”) of an APU system (based on the 18W dual-core processor codenamed “Zacate” and the M1 chipset codenamed “Hudson”) with the latest AMD system codenamed “Nile” (which is based on an AMD Athlon™ Neo II Dual Core processor, SB820 Southbridge, RS880M Northbridge with an ATI Mobility Radeon™ HD 5430 discrete......

Words: 3600 - Pages: 15

Free Essay

Lca of Nissan

...Individual Assignment 2: LCA of two products Life Cycle Assessment of Nissan Cars *ASR: Automobile Shredder Residue. ASR is what remains after material recycling is done to recover as much ferrous and non-ferrous metallic material as possible from the automobile shredder residue. Nissan conducted LCAs since the early 1990s, and made quantitative comparisons to understand the environmental impact of materials that were changed in the following parts. * Radiators * Air conditioners * Front-end modules * Back doors Based on the results of the LCA Project carried out by the LCA Committee of the Japan Automobile Manufacturers Association from October 1997 to March 2001, Nissan reviewed in-house LCA methods and calculated results for major models. * May 2005: Inventory analysis was certified as being in accordance with the LCA method stipulated in JIS Q14040 by the Japan Environmental Management Association for Industry. Models that have undergone LCA: Skyline (made in Japan), Dualis (made in England) To develop more environmentally-friendly vehicles, LCAs are also conducted for new technologies that are introduced. These results are used to achieve the goals set out in the Nissan Green Program 2010* and the Nissan QCT-C* management policy, which clarify our environmental efforts. * *Nissan Green Program 2010: An environmental program that establishes activity plans and specific numerical targets for Nissan......

Words: 1239 - Pages: 5

Premium Essay

Strategic Management Accounting

...DANTES Environmental costs and environmental impacts in a chemical industry eLCC and LCA on two colorants Stefan Bengtsson & Li Sjöborg Product Stewardship & Sustainability Akzo Nobel Surface Chemistry April 2004 Preface This report is the result of our master thesis work at Chalmers University of Technology in Gothenburg. The project was performed at Akzo Nobel Surface Chemistry Sweden and at the department of Environmental System Analysis (ESA) at Chalmers. Sver ker Molander at ESA and Karin Sanne at Akzo Nobel have been the supervisors for this thesis work and we’d like to thank both of them for their support and their many good ideas. Additional thanks goes to the employees at Akzo Nobel Surface Chemistry Support Unit Sweden and to everyone we have been in contact with when collecting data to this thesis. Thank you! Göteborg, May 2004 Stefan Bengtsson Li Sjöborg Summary As the awareness of environmental problems increases so does the demands and guidelines from legislations and customers that deal with the environmental problems of the industries products and manufacturing processes. For a large international chemical company such as Akzo Nobel these increasing demands lead to costs for administrative work, taxes, testing, additional staff and investments. The aim of this study is to determine the properties of these “environmental costs” for the products of a chemical company. The study has focused on the production of two colorants. A surfactant (Berol......

Words: 18884 - Pages: 76

Free Essay

Beeswax Candles

...This paper presents a life cycle assessment of beeswax candles in the effort to confirm that beeswax candles are more sustainable and environmentally friendly than other comparable variations. Various types of candles are burned every year by millions of consumers; the United States Environmental Protection Agency reports that candle and incense sales exceeded a million dollars in 1999 (Knight, Levin, & Mendenhall, 2001). Beeswax candles, however, are one of the few sustainable and environmentally friendly types of candles available to consumers. Through the exploration of how the collection beeswax affects bees, the energy used and pollution created through candle production and transportation, and the effects burning candles and their disposal have on the environment, a thorough life cycle assessment will support the claim that beeswax candles are the most sustainable and environmentally friendly candle available on the market. To support the aforementioned claims, the environmental effects of other types of candles will be compared to those of beeswax candles. The collection of beeswax can be traced back millions of years and these traditional ways of beekeeping are still used today (Bradbear, 2009, p.1). Breadbear describes that beekeepers have found that the end of a flowering season is the best time of the year to harvest the honey (2009, p. 42). She explains more thoroughly, The honeycomb can be simply cut into pieces and sold as fresh, cut comb honey.......

Words: 2249 - Pages: 9

Free Essay

The Life Cycle Assessment of Cell Phones

...The Life Cycle Assessment of Cell Phones The mobile phone has become an essential product all around the world. A small handheld device with the ability call, send messages, and access the internet from almost anywhere in the world has become a necessity for many citizens of developed countries. Due to rapid technological advances, cellular phones become obsolete in a very short period of time. The average lifespan of a cell phone is only 18months in the US (LCA of Cell Phones). With over 233 million active cell phones in use in the US alone and 4 billion worldwide, it’s mindboggling to consider how many phones that have been created and discarded over the past few decades. 1. What environmental impacts are the most significant? The energy usage costs accounts for over 30% of the total life cycle energy (LCA of Cell Phones). Depending on how the electricity is created (coal, natural gas, oil, etc.) lots of greenhouse gases and other pollutants are released into the air. 2.      What lifestage(s) contribute the most to these impacts? Energy usage occurs in the Product Consumption stage. The daily recharging of the battery is a huge energy obligation. 3. What are the strengths, flaws, and limitations of the analysis? The analysis has a great amount of cell phone data within the US and gives great examples of LCA goals from companies like AT&T and Nokia. However there is almost no information about the LCA from the global perspective. Also there is no......

Words: 468 - Pages: 2

Free Essay

The Case of Unidentified Industries


Words: 22173 - Pages: 89

Premium Essay

Costing Systems

...Costing Systems 2 Identifying the full range of sustainability impacts a vital stage in better decision making. A number of companies have begun the transition to improved social and environmental cost accounting using methodologies such as activity-based costing (ABC), life-cycle assessment (LCA), and full cost accounting (FCA) (Epstein, 2008). ABC assumes that activities related to products, services, and customers cause the costs. ABC first assigns costs to the activities performed by the organization (direct labor, employee training, regulatory compliance) and then attributes these costs to products, customers, and services based on a cause-and-effect relationship (Epstein, 2008) The main advantages of ABC include an assessment of costs of individual activities, based on their use of resources; accurate costing of activities to be obtained throughout an organization; ease of identification where high (and low) costs are being incurred (and the cause), and serving as a valuable tool for both business and process improvement. It also helps with future product planning; ie: the cost of all activities associated with a product or service can be accurately determined before it is launched. This can then help with determining pricing, and any associated expenditure. However there are disadvantages to ABC as well. It may be difficult to set up or establish, particularly if an organization is using more traditional accounting methodologies. It can be time consuming......

Words: 879 - Pages: 4

Free Essay

Pdf Hrbrid Car

...fleet, three scenarios of introduction of 10–30% fuel cell vehicles including plug-in hybrids configurations were analysed. Considering the scenarios of increasing hydrogen based vehicles penetration, up to 10% life cycle energy consumption reduction can be obtained if hydrogen from centralized natural gas reforming is considered. Full life cycle CO2 emissions can also be reduced up to 20% in these scenarios, while local pollutants reach up to 85% reductions. For the purpose of estimating road vehicle technologies energy consumption and CO2 emissions in a full life cycle perspective, fuel cell, conventional full hybrids and hybrid plug-in technologies were considered with diesel, gasoline, hydrogen and biofuel blends. Energy consumption values were estimated in a real road driving cycle and with ADVISOR software. Materials cradle-to-grave life cycle was estimated using GREET database adapted to Europe electric mix. The main conclusions on CO2 full life cycle analysis is that lightduty vehicles using fuel cell propulsion technology are highly dependent on hydrogen production pathway. The worst scenario for the current Portuguese and European electric mix is hydrogen produced from on-site electrolysis (in the refuelling stations). In this case full life cycle CO2 is 270 g/km against 190 g/km for conventional Diesel vehicle, for a typical 150,000 km...

Words: 302 - Pages: 2

Free Essay


...The Life Cycle Project for Envi Studies 101 – Due April 3, 2013 Part 2 – Supplemental Information RVCC – Spring - 2013 The over-arching concern is where does a product come from, how is it made and used, and where does it ultimately go in old-age? And how do all these stages and elements of the process impact the environment? The real world is also complicated by the fact that it is not just a composite or final product that has a life cycle, but generally a number of the components within the product have a cycle that plays out too. Our goal then is to gain some degree of understanding of how everything we use goes through a chain of causation and usage that has potentially many impacts on resources, human life and planetary ecosystems. One approach to the research component of this project is given further below for a generic cell phone. You don’t have to follow the approach given for your product as long as what you do is logical, reasonably complete, clearly written and covers the key elements in a Life Cycle Analysis, which are:  What are 2-3 key raw materials required to make the product? Perhaps Hydrocarbons (oil, coal or natural gas) are needed somewhere in the process of extracting, refining or processing of raw materials. Such carbon resources may be needed to make fuel, electricity, plastics, industrial chemicals, medicines, etc. Perhaps concrete or other industrial materials are required. Ore may be needed and require smelting for metals......

Words: 777 - Pages: 4

Free Essay

Product and Service Design

...STUDY OUTLINE FOR CHAPTER 4 PRODUCT AND SERVICE DESIGN 1. Why is product or service design strategically important? Product and service design has typically had strategic implications for the success and prosperity of an organization. Furthermore, it has an impact on future activities. Consequently decisions in this area are some of the most fundamental that managers must make. 2. List some of the things that product and service design does. 1)Translates customer wants and needs into product and service requirements. 2)Refine existing products and services. 3)Develops new products and/or services 4)Formulates quality goals, and cost targets. 3. Give a few examples for each of these major reasons for design or redesign: Economic -low demand, excessive warranty claims, the need to reduce costs. social and demographic -Aging baby boomers, population shifts. political, liability, legal -Government changes, safety issues, new regulations. Competitive -New or changes products or services, new advertising/promotions cost or availability -Raw materials, components, labor, water, energy Technological -Product components, processes 4. What are the key questions of product and service design? 1)Is there demand for it? What is the potential size of the market, and what is the expected demand profile? 2)Can we do it? Do we have the necessary knowledge, skills, equipment, capacity, and supply chain...

Words: 1392 - Pages: 6