Product Lifecycle and Smartphone Essay

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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.

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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 costs and focus on a niche market, or discontinue the product (Gorchels, 2006).

Business Problem

Founded in 1984, RIM experienced tremendous growth in the first two decades and a half or so of its existence. During that period, the company made remarkable innovations in wireless and mobile communications, introducing the first two-way communication pager in 1996 and the first smartphone in 2000 (Friend, 2013). For the telecommunications industry, RIM was the game changer, significantly revolutionising the way human beings communicate. At the time of its peak in September 2012, RIM had approximately 80 million subscribers globally, with revenues in excess of $19 billion. The BlackBerry was at the time the most preferred smartphone worldwide, a major achievement for the company in terms of building brand preference. From late 2012, however, RIM's glory started diminishing, in large part due to the increased competitive strength of Apple Inc. and other smartphone manufacturers (Arthur, 2014). In the last four years, the company has consistently recorded a stark decline in revenues, profitability, and subscriber numbers. Even with extensive strategic and leadership changes, restructuring, and change of name from RIM to BlackBerry Limited in recent years, the company is yet to regain is previous glory.

One of the major reasons for RIM's decline is the failure to innovate and respond to the changing needs of consumers. Noticing RIM's shortcomings, Apple and Android vendors introduced more superior smartphones to the market -- devices with larger touchscreen displays, faster processing speed, more appealing designs, more applications, a better user experience, and so forth (Savov, 2016). While RIM's devices had an unparalleled reputation for security and functionality, the company ignored opportunities to make its products better, giving its rivals a perfect chance to knock it out of the market. At its maturity stage, the company had a chance to rethink its product strategy, particularly in the wake of increased competition. Nevertheless, choosing to retain its focus on the corporate consumer, the company did.....

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