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The concept of industry life cycle is one that relates to the various stages that an industry moves through right from initial product entry, up to its eventual decline. Typically, there are five stages or phases in the industry lifecycle. Gort and Klepper (1982) originally identified these five stages. These five stages include early stage, innovation phase, shakeout or cost phase, maturity phase and finally decline phase. The work of Klepper (1997) explored the concept of industry life cycles. His work reviewed a series of evidence on the entry, exit, corporate survival, and product innovation and organization structure in new and emerging industries in order to assess if these industries go through the regular business cycles as they progress towards old age. His work acted as a clear depiction of what happens in the evolution of modern age industries and product life cycle is what is used in elucidating this evidence. Yoo (2000) explored the theory of Industry Life Cycle by deriving an equilibrium timing of both entries and exits, coupled with the equilibrium output levels spanning the entire industry life cycle period. His work also examined the effects of rise in entry costs. By means of an extended model having three entrants, his work indicated that the very fist entry might effectively be delayed with the third firm and that the less efficient company may be used as the first entrant in certain exceptional cases. Maksimovic and Phillips (2008) examined industry life cycle about acquisition and investment. Their main work was however aimed at finding out if really, the firm organization matters in this process.
The work of Volpato and Stocchetti (2008) explored the management of product life cycle in the auto manufacture industry. They did this by evaluating the effectiveness of the carmakers using the product life-cycle model. Their work discovered certain interesting results about product life cycle. The first one is that new product development process must be timed appropriately by planning with regard to several generation of a product that are to be developed on a similar platform as opposed to basing it on the next generation model only. Transition management from the marketing point of view must be conducted in order to ensure a successful sale of products. Product policy in the product life cycle process such as differentiation is not as effective as product innovation. Simons (2011) explored the characteristics of product markets and industry life cycle. The work of Giachetti, Marchi, and Corradini (2012) presented the best work on the concept of industry life cycle within the technology-based arena. Their work explored the evolution of company’s product strategy over the entire life cycle of information technology industries. The most interesting point that can be extracted from their work is that the global mobile phone industry experienced or entered the shake-out/cost phase in the 2000s. Strategy has therefore shifted from product towards process innovation. Innovation is also noted to play a major role in industry maturity.
1.1 Phases of industry life cycle
The work of Dinlersoz and MacDonald (2009) identified the following five phases in the development and maturity of an industry.
- Early Stage Phase- This is an alternative product design as well as positioning stage. It involves the establishment of range as well as boundaries within a given industry
- Innovation Phase- In this stage, product innovation is noted to decline while process innovation kicks in. It is at this phase that the ‘dominant design’ arrives
- Shakeout Phase- At this stage, firms settle on their ‘dominant design’ and they achieve their economies of scale. This forces the smaller industry players to exit or be acquired. Barriers of entry get extremely high and large-scale consolidation is achieved.
- Maturity- In this stage, growth is noted to be no longer the focus and both cash flow and market share become the main goal of firms that are left in operation.
- Decline – At this stage, industries experience a decline in revenues. A new industry may replace the existing industry as a whole
This literature review indicates that there is a general lack of literature or knowledge on the role of industry life cycle in the development and marketing of information technology-based products and services such as the Android Smartphone technology system. In this paper, we explore this gap in knowledge through a critical analysis of the Smartphone industry. A case in point is how and when the Android OS changed the smartphone life cycle as depicted in Ferreira’s (2011) article.
2.0 Three themes that are present in Ferreira’s (2011) article titled “Android OS changes Smartphone life cycle”
A review of Ferreira’s (2011) work indicates that there are three main dominant themes. These are changing nature of customer needs, technological advancement and corporate social responsibility
2.1 Changing customer need
Consumers’ need for stylish and highly multi-functional cell phones is what has driven the development of smartphones and their respective operating systems (Lin and Ye, 2008, p.617). It is important for manufacturers and other players within the smartphone ecosystem to monitor the dynamism of consumer needs in order help them in gaining a competitive advantage. Advancements within the smartphone ecosystem are continuously increasing and surpassing one another as new versions are constantly hitting the market at great speeds. According to Kano’s theory of customer satisfaction, customer satisfaction is directly proportional to the degree to which a given product or service is adequately functional. The changing nature of customer needs has led to constant operating system upgrades.
2.2 Technological advancement
Advances in technology have created a number of innovations within the smartphone ecosystem. The advent of Android operating system has resulted in the creation of better and more efficient smartphone systems. The Android technology offers a perfect example of how technology can be can be leveraged to enhance user experience (Ho & Chen, 2011)
2.3 Corporate Social Responsibility
Kotler and Lee (2005) defined the concept of corporate social responsibility as “a commitment to improve community well-being through discretionary business practices and contributions of corporate resources” (p.3). This means that a given business entity must have objectives that surpass financial gains. Within the smartphone ecosystem, players must ensure that all hardware and software applications are built while having the benefits to the community and environment in mind. In the past, the global smartphone industry was heavily criticized for building their hardware from minerals sourced through illegitimate and conflict-ridden sources. Titanium, Gold, Tungsten and Tin, the base materials for smartphones’ electronics were for long sourced from the eastern Democratic Republic. These minerals were being sourced in places where countless number lives were lost due to blood money generated from the illegal mining and smuggling activities in .............
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