Final answer:
Trade-offs in PLC involve balancing R&D investment with profitability, product quality with cost efficiency, and market penetration with profit margins.
Step-by-step explanation:
Trade-offs in Product Life Cycle (PLC)
Trade-offs in the context of a Product Life Cycle (PLC) are common as companies attempt to balance various business considerations during a product's journey from development to decline. One trade-off involves the balance between R&D investment and profitability. In the early stages, significant investment in research and development is required, which can reduce short-term profits but is essential for long-term success.
Another trade-off is between product quality and cost efficiency. Enhancing a product's quality and features can lead to higher production costs, which might affect pricing strategies and overall market competitiveness.
The third trade-off can be seen in market penetration versus profitability. Companies might lower prices to increase market penetration but at the cost of reduced profit margins. This strategy can be effectively used during the growth stage of the PLC to establish market share but may not be sustainable in the long term.