Product Lifecycle as a Management Approach for Circular Economy

Key Takeaways  

• The product lifecycle describes the phases of a product, from market introduction to end-of-life, and take-back. 

• The circular economy expands each of these phases: from circular design and conscious use to closing material loops.  

• Methods such as Life Cycle Assessment (LCA), Product Lifecycle Management (PLM), and Product Data Management (PDM) make circular economy performance measurable and manageable. 

• Core principles include resource efficiency, product responsibility, and systematic end-of-life management. 

• Companies benefit through lower costs, greater resilience, and the development of new business models. 

The Product Lifecycle (PLC): Explained   

The product lifecycle (short PLC) outlines how companies develop and introduce new products to the market (innovation), adapt existing ones (variation), expand their range through different versions (differentiation), or add entirely new product lines (diversification). When profitability declines, products are systematically phased out (elimination). 

Product variations also play a key role: they extend the lifespan of product families and help maintain market share, for instance, through different sizes, designs, or technical features. When developed with sustainability in mind, they support resource conservation and help stabilize market demand. 

The aim of the model is to systematically manage a product’s progression from market introduction to withdrawal, create transparency regarding revenue and profit developments, and ensure efficient use of resources. A key role in this process is played by Life Cycle Assessment (LCA), which quantifies environmental impacts across all phases, from raw material extraction and product use to recycling, and provides the basis for defining targeted measures to improve resource efficiency and reduce emissions. 

Background and Product Lifecycle Theories  

The theoretical origins of the product lifecycle concept date back to the 1960s. Raymond Vernon (1966), with his International Product Life Cycle Theory, demonstrated that products typically originate in highly developed markets, spread internationally during their growth phase, and are eventually relocated to low-wage countries. Hirsch (1967) added that each phase imposes specific requirements on marketing, production, and market strategies. 

These theories remain relevant today for two reasons: first, they illustrate the dynamic nature of products throughout their entire lifecycle; second, they emphasize that strategic decisions must always be made in a phase-specific manner. In the age of circularity and the circular economy, this approach has been expanded: not only sales and profit, but also resource use, environmental impact, and return strategies now shape a product’s lifespan. 

The Classical Model of the Product Lifecycle  

The basic model of the PLC forms the foundation for numerous advanced concepts in marketing, innovation, and strategic research. It describes the typical progression of a product’s sales and profit development across successive phases and thus serves as a key instrument for planning and managing product strategies. 

1. Introduction: In the first phase, the product is launched, usually accompanied by high investments in marketing and brand development. The break-even point marks the transition into profitability. 
2. Growth Phase: The product gains market share, demand rises, and initial profits are generated. Competitors respond with imitators, increasing price pressure and the need for differentiation. The goal is to secure market share and strengthen the competitive position through targeted investments. 
3. Maturity Phase: The maturity phase marks the peak of the lifecycle: sales and profits reach their maximum before growth stagnates. Companies focus on differentiation, brand maintenance, and efficiency improvements to sustain demand for as long as possible. 
4. Decline or Degeneration Phase: In this phase, demand decreases due to technological innovation, changing customer preferences, or market saturation. Profits shrink, requiring companies to react strategically—through product elimination, relaunch, or focusing on niche markets. 
5. Aftermarket or End-of-Life Phase: This phase covers all activities after serial production: warranty services, spare parts supply, product take-back and disposal, as well as the reuse or decommissioning of production assets. 

While the classical model is primarily economically oriented, its extension within the context of the circular economy illustrates how each phase can be leveraged to conserve resources, reduce costs, and develop new business models. 

The Product Lifecycle Phases from an Extended Circular Economy Perspective 

1. Development – Sustainable  

Classical: In this phase, ideas, concepts, prototypes, and technical specifications are developed. 

From a circular value creation perspective, this phase is of central importance, as resource efficiency serves as the primary guiding principle. Already during the design process, it is determined to what extent a product will be durable, repairable, and recyclable. Key strategies include modularity, which enables easy repair and upgrading; high repairability to extend product lifespan; and the use of secondary raw materials or bio-based materials. Digital simulations and Life Cycle Assessments (LCA) further support the transparent evaluation and targeted optimization of product sustainability at this early stage.  

2. Introduction – Raising Awareness 

Classical: In this phase, the product is launched on the market; methods such as advertising, promotion, and market entry strategies play a central role. 

In the extended understanding of the circular economy, the market introduction determines not only economic success but also the acceptance of sustainable product features. Transparent information on materials used, energy efficiency, repairability, and planned take-back systems builds trust among customers. Targeted communication of these aspects encourages circular consumption behavior and increases the willingness to use products longer, return them, or switch to circular alternatives. Sustainability thus becomes an essential differentiating factor in the market. 

Growth – Scalability and Efficiency 

Classical: In this phase, production is expanded, processes are optimized, and capacities are increased. 

From a circular economy perspective, the growth phase aims to meet rising demand without placing excessive strain on the environment or resources. Efficient manufacturing processes, the use of renewable energy, and digital technologies for process optimization help conserve resources and reduce emissions. At the same time, recycling and take-back structures are established so that materials and components can be reintegrated into the cycle at an early stage. In this way, growth becomes not linear but sustainable and resilient. 

Maturity – Extending the Use Phase  

Classical: In this phase, the market is established, often with high profits. However, generating new momentum becomes increasingly difficult. 

From a circular economy perspective, the maturity phase represents the peak of the product lifecycle. While traditionally the focus has been on improving efficiency, attention is now shifting toward extending product lifetimes. Measures such as regular maintenance, repair services, modular spare parts, software updates, and innovative business models like Product-as-a-Service help prolong product use and reduce the need for new production. As a result, resource consumption decreases, the overall environmental balance improves, and stable revenue streams are maintained. 

Decline – Responsible Take-Back  

Classical: In this phase, sales and profits decline, and the product is withdrawn from the market.  

Within a resource-efficient and circular business approach, corporate product responsibility comes increasingly into focus. Companies are expected to make not only economic but also ecological decisions, taking responsibility for the return and recovery of their products. Deposit systems, proprietary take-back programs, or partnerships with specialized service providers ensure that end-of-life products are not disposed of uncontrollably. A design optimized for disassembly enables the separation of materials by type and forms the basis for high-quality recycling and remanufacturing processes. 

End-of-Life Phase – Closing the Loop  

Classical: In this phase, production has ceased, and products are often disposed of.  

In a holistic understanding of circular value creation, the end-of-life phase is not seen as the endpoint but as a transition into a new cycle of use. This is where end-of-life management comes into play, encompassing strategies such as remanufacturing, where products or components are comprehensively reconditioned; upcycling, which transforms materials into higher-value applications; and high-quality recycling, which feeds recovered raw materials back into the economic cycle. In this way, materials such as metals, plastics, or battery raw materials can be reused in subsequent product generations (more on the underlying R-strategies of the circular economy). The goal is not to lose resources as waste but to keep them within the value creation process for as long as possible, thereby achieving a truly closed loop. 

Practical Example: The Automotive Industry  

The automotive industry illustrates exemplarily how the circular economy and the product lifecycle are interconnected: car-sharing and leasing models extend the usage phase of vehicles, while take-back systems ensure that they can be systematically transferred into remanufacturing processes. There, key components such as engines, transmissions, or batteries are reconditioned and remarketed—at significantly lower costs compared to new products. At the end of the lifecycle, raw materials such as steel, aluminum, or lithium are recycled and integrated into new vehicle generations. This reduces material costs, decreases dependency on critical raw materials, and simultaneously creates new business models around second-life batteries, spare parts, and refurbishment services.  

Responsibility in Every Phase  

Responsibility for sustainability throughout the product lifecycle extends across all phases and must not be limited to production alone. 

Design & Production: The Foundation of Sustainability  

The key decisions are made as early as the design and production phase. Crucial factors include: 

• Resource efficiency and eco-design  
• Modular construction  
• Energy- and emission-efficient manufacturing 
• Use of secondary materials  
• Closed-loop production systems  

These factors determine how durable, repairable, and recyclable a product is, and significantly contribute to reducing its ecological footprint. 

Use & Maintenance  

In the use and maintenance phase, the focus lies on extending the product’s lifespan. Key measures include: 

• Innovative business models such as Product-as-a-Service (PaaS) 
• Repair services and modular spare parts  
• Software updates 
• Sharing concepte 

These approaches increase utilization, conserve resources, and reduce the need for new production. At the same time, manufacturers directly benefit from durable products. 

Take-Back & Recycling 

In this phase, companies assume responsibility for returning materials to the economic cycle. Relevant measures include: 

• Establishing proprietary take-back systems  
• Introducing deposit models  
• Collaborating with specialized recycling partners
• Designing for disassembly to enable material separation by type  
• Using digital product passports to ensure material transparency and traceability 

These measures form the foundation for high-quality recycling and remanufacturing processes. 

H3: Methodological and Technological Tools  

The following instruments are key to implementing responsibility effectively: 

• Life Cycle Assessment (LCA): Provides a quantifiable basis for evaluating environmental impacts  
• Product Lifecycle Management (PLM): Integrates sustainability strategies across the entire value chain  
• Product Data Management (PDM): Ensures consistency of technical and organizational data 

This demonstrates that sustainability and circular economy are not isolated initiatives, but are firmly embedded in every phase of the product lifecycle. 

EFS Circular Economy Experts Explain: How Can Companies Benefit from Integrating Sustainability into the PLC? 

Integrating circular economy strategies into the product lifecycle offers companies a clear economic advantage. It enables them to unlock both ecological and, above all, economic potential at every stage – from cost savings and new revenue streams to increased resilience against market and resource risks. 

In the development phase, consistent eco-design reduces material, energy, and disposal costs by making products modular, repairable, and recyclable. At the same time, the use of standardized components shortens development times and increases production efficiency. 

During the introduction and growth phases, transparent communication of sustainable product attributes strengthens brand image, opens new customer segments, and creates differentiation in the market. This allows for premium pricing strategies and higher market shares. 

In the maturity phases, maintenance, repair, and service offerings generate additional revenue streams. Extended product lifetimes reduce the need for new production and therefore lower fixed costs, resulting in more stable cash flows and predictable returns throughout the lifecycle. 

In the decline phase, take-back and remanufacturing processes open new profit opportunities: refurbished products can be reintroduced to the market with attractive margins, while procurement and material costs are significantly reduced. 

High-quality recycling in the end-of-life phase ensures the recovery of valuable raw materials, reduces dependency on volatile resource markets, and stabilizes material cost structures in the long term. The result is a closed value creation loop that enhances not only ecological but also economic stability and competitiveness. 

Conclusion 

Today, the product lifecycle is far more than a business management tool – it has evolved into a holistic management approach that combines ecological responsibility, economic efficiency, and technological innovation. Integrating resource efficiency, product responsibility, life cycle assessment (LCA), end-of-life management, and digital solutions such as Product Lifecycle Management (PLM) and Product Data Management (PDM) enables companies to view products not as linear processes but as integral parts of a circular system. 

EFS Consulting supports companies in turning sustainability into measurable value – through clear strategies, effective processes, and data-driven solutions across the entire product lifecycle. 

FAQs 

What is the product lifecycle? 

The product lifecycle encompasses all phases of a product – from development to end-of-life. In the context of the circular economy, it is expanded: sustainable design, resource efficiency, and material recovery turn it into an instrument for both ecological and economic value creation. 

What is the difference between PDM and PLM? 

Product Data Management (PDM) focuses on the structured management of technical data such as drawings or bills of materials, ensuring their consistency.
Product Lifecycle Management (PLM) integrates the entire lifecycle of a product, linking technical, organizational, and strategic aspects.
In short: PDM provides the data foundation, while PLM defines the management framework. 

What is a circular value chain? 

A circular value chain replaces the linear “take-make-dispose” model with closed loops. The goal is to preserve the value of products, components, and materials for as long as possible — making the end of one product’s life the starting point of new value creation.