Introduction
For a leader of any company, be it a small business or a large corporation, it is essential to analyse its current state, define the factors that influence it and try to predict the future of the firm itself or its product. Various methods and models allow managers to do that successfully and even avoid a decrease in demand for a company’s goods or services. One such tool is the life-cycle model: by studying its stages and determining which of them the business is currently at, leaders can make their decision-making process more effective. The purpose of this paper is to discuss the life-cycle model itself and then analyse whether the smartphone industry followed the pattern of this model.
Defining the Life-Cycle Model
To begin with, it is essential to define the industry life-cycle model and then talk about its stages and importance. According to Cubico et al. (2018), the industry life cycle refers to the overall duration of the whole industry or a particular company from beginning to end. In other words, it is the concept that describes how businesses or industries evolve and pass through four mandatory stages: “introduction (or emergence), growth, maturity, and decline” (Grant, 2018, p. 191). The first stage refers to developing an idea and introducing the industry or a company; generally, the sales are small and the industry’s products are yet unknown. In the growth stage, market penetration is accelerating due to the increasing number of clients and technical improvements (Yu, 2021). The third stage (maturity) is characterised by the growing market saturation, which then is changed by demand for replacement (Cubico et al., 2018). When this happens, it is possible to say that the industry reaches the decline stage. All companies go through the life-cycle stages. The only question is how long the particular industry will be able to stay in the maturity stage.
The Extent to Which the Evolution of the Industry Followed the Life-Cycle Model
Many industries have already passed or are passing the life-cycle stages and now allow researchers to study them. The smartphone industry is especially interesting as it emerged relatively recently, and it is likely that after several decades, the industry will enter its decline phase, as statistics show that the demand is already decreasing (Zahran, 2021). Some representatives of current generations remember living without cell phones, and nowadays, people can witness the maturity stage of the smartphones industry.
It is possible to say that the introduction stage of the smartphone industry started in the 1990s when the first PDAs were created. Back then, the idea of having a computer in one’s pocket started to seem more real, and major manufacturing companies began their work. During the following several decades, the industry was in its growth stage: people all over the world began to recognise the value and convenience of a smartphone, and more and more persons could afford to buy one. This phase was also defined by the introduction of iPhone devices and the subsequent onslaught on various Android models (Zahran, 2021). The more new features and updates manufacturers offered, the more often people changed their smartphones to a newer model (Zahran, 2021). The sales and the number of customers were increasing rapidly, and technologies started to be more innovative, which are the major signs of the growth stage.
Nowadays, there is no doubt that the smartphone industry is in its maturity phase. According to researchers, “this means that innovation has slowed, and users of the technology no longer see a need to upgrade their devices that often” (Zahran, 2021, para. 3). Although a new Galaxy or iPhone model is released every year, there are no major innovations or improvements. At the same time, the industry is still popular, and in developed countries, it is now unlikely to find many persons without a smartphone. To predict the future of the industry, it is possible to compare it with the life cycle of the hotel industry. As noticed by Grant (2018), in America, hotels were established in the eighteenth century, and by now, the industry has reached the maturity stage. However, with the growing popularity of services like Airbnb, there is a threat to the hotel industry, and it is likely that it will reach the decline phase soon.
Surely, there are some advantages and disadvantages of the industry life cycle. For example, it is rather good that companies and products change each other and people are offered newer goods and services (Yu, 2021). Additionally, leaders can benefit from this model as it provides them with the opportunity of proper analysis of the strengths, weaknesses and future possibilities of their businesses. As for the disadvantages, the industry life cycle means that there is an end to every product or company.
Conclusion
To draw a conclusion, one may say that studying the model of industry life cycles may be rather interesting and helpful for both researchers and leaders of companies. For the latter, it is especially useful to understand why their products become less demanded or how to make their business more successful and long-lasting. Eventually, all products and industries will decline because customer needs never stop growing and changing. What is possible for businesses is to try to stay in the maturity stage of the industry life cycle for as long as they can. In this case, the leaders of companies can gain profit and even offer consumers a replacement for their own product, which will help them exit the declining industry and enter the emerging one.
Reference List
Cubico, S. et al. (2018) Entrepreneurship and the industry life cycle: the changing role of human capital and competences. Berlin: Springer.
Grant, R. M. (2018) Contemporary strategy analysis. 10th edn. Hoboken, NJ: Wiley.
Yu, X. B. (2021) The fundamental elements of strategy: concepts, theories and cases. Basingstoke: Springer Nature.
Zahran, O. (2021) The yearly smartphone redesign no longer makes sense. Web.