Running head: CHAPTER 7 DISCUSSION QUESTION 1
Chapter 7.1 Discussion Question
Name
Institution
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CHAPTER 7 DISCUSSION QUESTION
Chapter 7.1 Discussion Question
Impact of mobile phone industry’s life cycle on the business strategy
Mobile phone industry is one of the industries whose life cycle has greatly affected the
business strategy for various firms for a very long time. The effects have been felt within the
stages of the life cycle including introduction, growth, shakeout, maturity, and decline. Apple is
one of the phone company whose growth and expansion have been influenced by the life cycle of
the phone industry
In the infancy stage of the mobile industry, many firms had not ventured into the industry.
Apple used the opportunity to offer unique products into the market. At this stage the future of
the industry was unpredictable; thus Apple invested heavily in marketing strategies that could
enable it to gain preference within the market (Rothaermel, 2017). The period was characterized
by few products and limited promotional activities and this limited the profitability of the Apple
product since they were new in the industry. Firms would employ different strategies to survive
this stage of the life cycle. For instance, Apple introduced new models which had similar
functions but were based on different styles. The models resulted in multiple sales to the same
buyer since the products were new to the market. Apple also introduced iPod models with
various versions to create appeal to the new customers (Więcek-J Papierz, Kornecka, & Nitka,
2017).
Growth
Mobile phone industry grew at this stage and consequently attracted a larger market
segment. The firms started to grow exponentially and profit increases. Complementary products
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CHAPTER 7 DISCUSSION QUESTION
were introduced resulting from increasing demand as well as a decrease in prices of the products.
At this stage, intense competition is exhibited in the market by other firms to achieve market
share and substitutes are gaining popularity (Rothaermel, 2017). To survive this stage, Apple
Company created a technology framework which was targeted at opening market places for
supply and application. Moreover, this stage implies that the firms must be innovative enough to
survive the competition that emerges from other similar firms.
Shakeout
At this stage, the industry is fully consolidated, and this stage can lead to the elimination
of some firms (Rothaermel, 2017). Firms are eliminated because they are not able to grow within
the competitive environment and some may also be eliminated because they are generating
negative cash flows. In the mobile phone industry, some firms merged with their competitors to
obtain a bigger market share. Apple developed a long-established reputation for commitment and
innovation thus have been able to survive this stage based on its new products. For example, it
came up with a graphical user interface and pioneered iPod which can play music. It also
introduced new levels of smartphones with high performance (Więcek-J Papierz, Kornecka, &
Nitka, 2017). At this stage, cash flows, profits, and growth of revenue move towards maturity.
Maturity
Well-established firms occupy the mobile phone industry in this stage because the
industry has reached a saturation point. The firms attempt to protect themselves and sustain their
competitive advantage. In an attempt to survive this stage, Apple Company developed innovative
products that have a common operating system, applications, and software (Więcek-J Papierz,
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CHAPTER 7 DISCUSSION QUESTION
Kornecka, & Nitka, 2017). This stage influences the firms to employ strategies that make them
dominant to reduce competition. The stage, therefore, ensures monopoly within the industry.
Decline
This is the last stage of the industry cycle. The stage affects the firms within the industry
as attributed to factors such as the level of exit barriers, the height of fixed costs, and speed of
decline. It influences some firms to focus on the most preferred and profitable products. Some
firms will also tend to absorb smaller firms and failing firms to boost their dominance. Apple as a
firm within the mobile phone industry is equipped with a variety of suppliers, business partners,
and developers; thus it exhibits a strong competitive advantage to survive this stage.
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CHAPTER 7 DISCUSSION QUESTION
References
Rothaermel, F. T. (2017). Strategic management concepts (Custom 3rd ed.) New York, NY:
McGraw-Hill.
Więcek-Janka, E., Papierz, M., Kornecka, M., & Nitka, M. (2017). Apple products: A discussion
of the product life cycle. In 4th International Conference on Management Science and
Management Innovation (Vol. 31, pp. 159-164). Retrieved from
https://www.researchgate.net/profile/Ewa_Wiecek-
Janka/publication/319136921_Apple_products_A_discussion_of_the_product_life_cycle/
links/599417d8458515c0ce64f927/Apple-products-A-discussion-of-the-product-life-
cycle.pdf
