Product Life Cycle

Compaq n starbooks 1. 0 INTRODUCTION Compaq Computer, based in Houston, Texas, is the worlds bulkyst personal computer manufacturer and the fourth largest information technology (IT) gild. From 1992-1997, the communitys aggressive gamy volume PC scheme propelled it to senior high produce rates in revenues, date its leadership in PC servers sustained strong margins and drove profit growth. Starting in 1995, fountain CEO Eckhard Pfieffer began to transform Compaq from a pure PC fellowship to a full-service IT high society, with the goal of becoming a $50 billion company that could debate with the likes of IBM and Hewlett-Packard.The recognise strategic moves were the acquisitions of Tandem Computer and Digital Equipment Corporation in 1997 and 1998, well-favored Compaq a diverse line of technologies and service capabilities. Compaq began revamping its information systems in 1994, configurationing global enterprise information systems to support its globally optimized ma nufacturing and browse fulfillment operations. The systems were built primarily around SAP applications, rushning on Compaq PC servers and the Windows NT operating system in order to demonstrate that large enterprise systems could run on Compaq hardw be.Compaqs IT people were forced to give off the SAP applications across ten interconnected sites around the world and tailor extensively in order to run on Windows NT and meet Compaqs needs. Compaq stumbled badly in 1998 as it faced advanced challenges in the PC market and tried to assimilate Tandem and Digital. In contingent, Compaq struggled to catch up with Dell Computer, whose direct gross sales build-to-order seat gave it a big profit in greet and speed oer Compaqs indirect sales, build-to-forecast approach.When the company disap drawed investors with poor results in 1999, the board removed Pfieffer, who had been credited for Compaqs previously stellar performance. Since Pfieffers departure, Compaq has reorganized itself along business lines, silklike its distri further whenion crinkles and developed a new electronic traffic strategy called NonStop eBusiness. Compaq has gone through a series of IT reorganizations aimed at giving business units more control over IT decisions and resources. Compaqs new CEO, Michael Capellas, came to the company in 1998 as CIO and was the force behind this reshaping of the IT organization.It is likely that saucily hired CIO Robert V. Napier allow continue the process in order to set IT with the new corporate structure, while similarly working to implement Compaqs e-business strategies. Since 2007 till now Compaq Company has many harvest-tides as follow in 2007 they provide laptop Compaq Presarios to their node, in 2008 they amend and developed Aero 4/33c Notebooks, and in 2009 they provide new model E500S Notebooks, 2011 EZ2700 Desktops and LT 486/33 Desktops at the same year. 2. 0 Compaq Cash flow The issues of cash flow for each decimal point of the cr op life cycle they be complete each well-nigh other.Cash flow for a harvest-home as it moves on the life cycle curve allow for change. Its really important to know and plan each tip for our harvesting to be success. 2. 1cash flow in the five lay outs Introduction form, The presentation of a new convergence onto the market is typically characterised by very slow sales, which may grow only very slightly over a long period of era. Whilst shekels will gradually improve during this ramification, it may take until near the completion of the introductory dress in the PLC before the company witnesss positive profitability.The reason for overmuch(prenominal) low profitability during this stage is not so much the express mail success of the convergence measured in terms of low, albeit growing, sales but the high cost of exertion and promotion that are compulsory to guess to develop guest sensitiveness. R&D expenses are really high for Compaq in e peculiar(a)ly in ter ms of smart laptop, because now Compaq is sorrowful in a new path of technology and there is no resource for them to use in order to reduce the R&D costs.Particularly in case of their new product Compaq Notebooks and Compaq Desktops that is already in foundation garment stage we jakes affect some spectacular features for the origin time ab extinct the Desktops. For guinea pig one of the new technologies that are used in Compaq Desktops is that it has a high quality and high processor. So we can see clearly that all of these new technologies contract a heavy cost for producers. That is the reason that Compaq invests at least 13% of its sales revenue into R&D activities every year. For example Compaq spent $45 million on R&D this year compared to its competitor Dell 25 million. increase stageThe growth stage in the PLC typically involves a rapid growth in sales as early adopters replace pioneers as the briny consumer group. Whilst pioneers are characterized as those consumers who purchase products near immediately when new products are builded, early adopters wait until the set starts to fall and some of the products potential weaknesses are ironed out. Compaq sales steadily increased as the product was promoted and became swell known. It maintained growth in sales until 2010 through expanding the original product with new developments of quality, style, speed and legal injury the total of cash flow.Compaq Desktops unit sales in 2009 14. 9 million PCs units and 10 million laptop units. very the growth stage for each company is a start point to collect its cash flow by the time, but for Compaq it starts form the first date of the product presentation directly. There are many devices in the market with Compaq product and services, why people prefer Compaq desktop? Quality, brand, footing and speed. Maturity stage The maturity stage in the PLC is a primordial point for a firm because it marks the turning point in the products success.Typically, the growth in sales decreases quite significantly and manufacturers over-capacity (that is, larger than required inventories) results in a reaction by the firm and its competitors to slash value. In this stage Compaq desktop has a partner and that is Compaq Notebooks and Compaq Presario. This is the best extension strategy for this stage and it is totally clear that Compaq had planned for these year Compaq development groups knew that they founder to present much(prenominal) a powerful product with the capability of front end in two stages at the same time.The total sales units in this year baffle grown fast for Compaq in 2011 4. 721 thousand units. extraction stage Clearly, at this point, Compaq had to make a key business decision. sales were falling the product was in decline and losing its position. Should Compaq let the product die, i. e. break up it from the market and give space for their new product. 2. 2 The Degree of opposition Faced by the crossway by Applying Porter s tail fin Forces of Competitiveness. The degree of competition between the competitors is very high. Successful products attract other competitor businesses to start selling similar products or service.This indicates the third stage of the life cycle maturity. This is the time of maximum profitability, when profits can be used to continue to build the brand. However, competitor brands from both Compaq itself (e. g. dell) and other company (e. g. acre) go gameed the same benefits and this slowed down sales and chipped away at computers market position. Compaq proceed to support the development of the brand but some products (such as quality, price and style), struggled in a crowded market. 3. 0 Improving the Companys Financial PerformanceRecommendations to improve performance will be focused on the product attributes and benefits with the aims to enhance driving experience and build brand personality. 3. 1 Promotion Sales promotions have a significant effect on the behavior of co nsumers and trades people. Such promotions can bring in more profits for the manufacturers because they permit price discrimination. 1. Price discrimination Producers can introduce price discrimination through the use of sales promotions. They can charge opposite prices to contrary consumers and trade segments depending on how sensitive each segment is to particular prices.Coupons, special sales events, clearance sales and discounts are examples to explain the phenomenon. 2. gist on consumer behaviour as sales promotions are mostly proclaimed for a short period, customers may tactile property a sense of importunity and stop comparing the alternatives. They are persuaded to act now rather than later. 3. pitch on trade behaviour Short-term promotions present an opportunity and foster dealers to forward buy. This forward buying ensures that retailers wont to go out of stocks. As dealers have more than the normal stocks, they think it advisable to announce in ocal media, arrange d displays and offer attractive promotion deals to consumers. These actions help in increasing the store traffic. 4- Exterior shape Exterior design is the key product attribute that plays an important office in enhancing the overall product brand image. We will look at compaq exterior design in terms of Shape Many feel that the overall design of compaq is not unique enough. compaq must invest in building its creativity and progressive on it to have own quality outlook/shape of product brand image. Color output affectation the range offered by compaq broadly not attractive or unique.As one of its core values is customer focus, compaq has to focus to be really customer oriented, knowing what the customers want and offer the range of colors that appeal to variant market segment effectively. 5- interior(a) Design Interior design of the laptop refers to its overall instrument panels such as the keyboard, the dash board, the other accessories and special feature in the laptop whi ch is perceived as not stylish. The materials used are also snarl as average low quality. Throughout the years, there is not much improvement in this area which can WOW the consumers.In fact, all these features will help to create apply experience. Interior design with aesthetic features and nigh sound protection will make the customer feels joy and kindle thus creating a strong positive feeling with the laptop using experience. 3. 2 Length of the Product Life pass Be elongate Compaq Company has many problems and some customers needs when they solve these problems the length of product life cycle will be longer, from improving their product, quality and price and other needs such as style color etc. change magnitude Sales a promotion can stimulate product sales.Manufacturers unremarkably reduce the price of a product to induce customers to make a purchase. In the short term this can increase the number of units sold, which can lead to increased market share in the long run i f the customer permanently switches from a competitors brand. 4-Brand Loyalty sales promotions can also be used to increase brand awareness and loyalty. Clubs or special memberships provide consumers discounts or promotions for continued use. 5-Impulse Sales Sales promotions can establish impulse sales. A customer may not be aware of a product until she enters a store and sees a sign advertising a sale price.Impulse sales also result from in-store demonstrations. 6- Exterior Design Exterior design is the key product attribute that plays an important role in enhancing the overall product brand image. We will look at Compaq exterior design in terms of Shape Many feel that the overall design of Compaq is not unique enough. Compaq must invest in building its creativity and innovative on it to have own characteristic outlook/shape of product brand image. Color Product color the range offered by Compaq generally not attractive or unique.As one of its core values is customer focus, Compa q has to focus to be really customer oriented, knowing what the customers want and offer the range of colors that appeal to different market segment effectively. 4. CONCLUSION Compaq business model has been analyzed in conjunction with the trade mix that is employed to identify its target Market. They build their brand name with their tagline, Compaq philosophy of low fares is aimed to make computers affordable for everyone. Compaq also aims at making using easy, convenient and fun for its customers.Their services and their set work together to identify their target market, however, their promotional activities and their distributional channel is aggressive developed, planned, and executed to target both foreigners and locals alike. Moreover, more advertising model should be developed and Compaq need to identify more suitable areas for distribution as more and more loss potential target could be captured which will at end generate huge revenue for Compaq. role Bliss, J. (1998). Expense May Thin Ranks Of AAP Plan, Computer Reseller News, April 13..Business Wire, CompuCom Co-Locates with Compaq to Increase Manufacturing Efficiency and inhibit Product Delivery Time and Cost, 7/7/98. Business Wire, Compaq Leverages Microsoft union In Aggressive Internal Windows 95 Transition Global Rollout leave behind Enhance Customer Support, 8/15/95. Commercial Times (Taiwan), Compaq to beget Taiwan Partners into Web-based Business System,. Compaq annual Report, 1998. Compaq Annual Report, 1999. Compaq Annual Report, 2000. Compaq Annual Report, 2001. Compaq Annual Report, 2002. Compaq Annual Report, 2003. Compaq Annual Report, 2008. CNET News. om, Compaq inks deal with PCOrder. com,, June 29, 1999. Crothers, Brooke, Compaq sees shortfall, plans reorg, CNET News. com, June 17, 1999. Dedrick, Jason and Kenneth L. Kraemer, 1998. Asias Computer Challenge menace or Opportunity for the United States and the World? New York Oxford University Press. Hamblen, Matt and Kathleen Ohlson Compaq public Sinks In, ComputerWorld, 6/21/99, Page 30 Hoovers Online, Compaq pro turn on. perseverance Week, Whats Really Driving Apples Recovery, 3/15/99. Jackson, D. ()1998). ERP Glitches Disrupt Compaq Order System, The Australian 10 Nov, p36.Product life cycleThe Product Life Cycle is indeed important in marketing since it tells the manufacturers when is the right time to launch a product and how should they launch it. The cycle is concerned with the changes in the product, price, distribution, and the promotion. The Product Life Cycle has four phases, the interpolation stage, growth, stage, maturity stage, and the decline stage.The introduction stage deals with the launching of the product. It concerns the product, price, distribution and promotion of the product. One pricey example for this is the Nokia N80i. This phone has a parcel out of other features that other phones do not have or it has combined features of different phones and it has turned into N80i. I t is a good example because it has just entered the market, and with the latest features, it can only be afforded by those who have extra $500 in their pockets. It is during this stage that one promotes his product, giving out leaflets or pamphlets, having conferences, and the like. And I believe that Nokia has done well in this part.Second, begets the growth stage. This is the time when the company focuses on the growth of the revenue and their product being the preference product of the consumers. During this stage, the company heightens the distribution of the product. The growth stage is when you improve and make innovations on your product. One successful example would be the portable DVD players.Portable DVD players have been launched for quite some time now. Furthermore, everybody is aware that there is this certain product operational in the market. As of now, there is a variety of portable DVD players. They come in different colors and can play different kinds of file acc ording to the buyers liking. It is definitely a good example for this stage.The third stage or rather the maturity stage is when the product is at its compass point in the market. This is considered to be the most profitable stage. This is when price are fall to have more buyers. Sales promotion is a must during this stage to maintain market share. This is also the stage wherein the company aims their product to different from the other substitute products in the market.For instance, personal computers have long been in the market. A lot of computer brands have also arose in the market, like, BenQ, Dell, Apple, and Linux. They have their own individuality and have their own identity. Furthermore, the prices of their personal computers have already decreased in comparison with its prices when it was first launched in the market.The last stage would be the decline stage. This stage is the time to decrease in end product and price. This is when the product is virtually obsolete, or there has been a change in the preferences of the consumers. Here are some ways to deal with the decline stage. The company may close shop or to fully stop production and sales, continue production at a lower rate while hoping competitors will close or leave the market. It can also be observed that in this stage, the distribution of the product becomes limited.This is what happened in the traditional tv cameras which only operate with tear. Only few companies sell this kind of cameras, unlike then, when almost all of the camera manufacturers compete to have the best kind of camera with film. But then, it has already been replaced by digital cameras that are a lot cheaper in the long run (since there are no costs for photo developing and film), and they also provide an instant preview of the delineation and are equipped with different settings for different uses.As of now, cameras that operate with film are cheaper than digital cameras. Yes, traditional cameras are almost obsolete . It is only available for some photo and camera stores in the country. And there are almost no promotional offers for this product.As said earlier, products have cycles, thats why they have innovations to remain attractive and profitable in the market.REFERENCESBool, Hans. (2007). A Normal Product Cycle-Some Examples. Ezine Articles. http//ezinearticles.com/?A-Normal-Product-Life-CycleSome-Examples&id=480455Komninos, Ioannis. (2002). Product Life Cycle Management. Urban and Regional Innovation inquiry Unit. http//www.urenio.org/tools/en/Product_Life_Cycle_Management.pdfProducts-Product Life Cycle. Tutor2u. http//www.tutor2u.net/business/marketing/products_lifecycle.aspThe Product Life Cycle. NetMBA. http//www.netmba.com/marketing/product/lifecycle/The Product Life Cycle (PLC). Marketing Teacher. http//marketingteacher.com/Lessons/lesson_plc.htm