RIM
Addressing Product Lifecycle Challenges at Research in Motion (RIM)
RIM, currently known as BlackBerry Limited, was one time the most valuable company in Canada and the largest smartphone manufacturer worldwide (Friend, 2013). Today, however, the company struggles to remain in existence, with revenues, subscribers, and profitability declining consistently since 2013. The fall of RIM can largely be attributed to poor product lifecycle management. This paper describes this problem in more detail and providers recommendations for addressing the problem.
Product life cycle theory demonstrates that a product generally goes through four stages: introduction, growth, maturity, and decline (Gorchels, 2006). The first stage, introduction, involves launching the product to the market. At this stage, there is little or no competition, giving the company an important competitive advantage in the marketplace. Nonetheless, costs tend to be high as the company has to develop the market for the product. High costs often mean little or no profitability. At the second stage, growth is experienced. Sales increase rapidly, costs reduce due to economies of scale advantages, profitability increases, greater awareness of the product in the market is achieved, and market share expands substantially. Nonetheless, competition increases, potentially resulting in reduced prices. The third stage, maturity, is characterised by further reduction in costs, market saturation (sales peak is attained), increased competition, reduced prices, and decreased profitability potential. Once saturation is reached, growth starts to decline. In the decline stage, sales volume reduces and profitability diminishes.
Every stage of the product lifecycle has important implications for marketing (Cant et al., 2006). In other words, the marketing mix must be adjusted accordingly at every stage. In the introduction stage, the focus of marketing is to develop product awareness as well as build the market for the product. This may be achieved through product branding, establishing product quality, obtaining intellectual property rights, penetrative pricing, selective distribution, and targeting promotional activities at early adopters. In the growth stage, the focus of marketing shifts to growing market share and building brand preference. The firm adds more innovative features to the product, adds distribution channels, maintains prices, and targets promotional activities at a larger audience. In the maturity stage, the aim of marketing is to protect market share. This may be achieved by differentiating the product from competition, lowering price, intensifying distribution, providing purchase incentives, and emphasising product differentiation in promotional messages. In the last stage, the firm has three options: retain the product by adding new features, minimise...
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