Friday, 20 May 2016

Product Life-Cycle

Product Life-Cycle
There are four stages of product life cycle. The initial stage entails the introduction of the product to the market. The customers need to be familiarized on the benefits of the new market entrant. It is one of the most difficult stages because there is a need for heavy investments on R and D (Research and Development) and the product promotion. In fact, the firm may be necessitated to sample the products to customers for free as a strategy of earning a market segment. The second stage commences when the firm makes profits from product sales. At this stage, sales revenue increase tremendously as more customers become aware of the product presence. This is the most appropriate time for a business entity to recover the expenditures incurred during the initial stage. In the second-last stage, product sales attain a maturity. The competitors set in with similar rivaling products. The company is prompted to lower the product price as a desperate move to maintain the market share. In the large stance product sales experience a free fall. Unless new strategies are considered for innovation and product diversification, the organization is faced with a threat of closure. The final stage is an appropriate time to consider business expansion to international markets (Stark, 2015). Most multinationals lice Apple Inc. have products at the maturity stage.
iPhones are resilient products from Apple Inc. the technology gadgets have enjoyed a market dominance for nearly a decade. Over the years, the company invests a significant amount of resources to produce the best smartphone in the market, however, the rise of other competent rivals such as Samsung, Huawei, and LG have dealt a major blow to Apple's phone products. Recent financial statement for the company indicates that iPhone purchase in the international market is sharply falling. It is an indication that the smartphone is at a maturity stage. To ensure a steady growth, Apple should invest more on the R&D and consider lowering the operational cost to ensure affordability of iPhone.
Samsung gear S2 is a sophisticated IT device that represents the latest advancement in technology. The product is at the growth stage of its life cycle because of large sales and profitability. Samsung Inc. is registering high sales revenue that forms a significant fraction of its annual revenue. It is evident that a few of tech giants have ventured into the smart gear production business, thus, the level of competition is negligible. Besides, the product is trending among the middle-income earners in the developed world. Therefore, high pricing is not an issue yet for Samsung. I recommend that Samsung Inc. should utilize the abundant income from the S2 gear to expand its production lines to the developing world. This way, the organization will prolong the dominance of the gadget in the market due to product affordability.
Android is open-ended software used by multiple phone makers including Samsung and HTC. Google Company team up with hardware producers to innovate an affordable product for their customers. It has dealt a severe blow to lone-wolfs like Apple and Windows tablets. While product uniqueness is fundamental in ensuring customer loyalty, affordability, and functionality of technological product ensures extensive sales growth. The case of Samsung and HTC smartphones is no different. The users are presented with multiple apps for free hence value for money. Today, Samsung Android phones are at the growth stage.
In summary, companies should have an in-depth understanding of the four stages of product development and life cycle. Such knowledge is vital in strategizing of measures to combat rising competition and the need for product innovation.

Reference

Stark, John. Product Lifecycle Management: Volume 1. , 2015. Internet resource.

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