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
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