Question

If Apple and Samsung merge,describe each of industry life- cycle model and discuss how they affected the two organizations.( only target at :mobile phone industry)

Answer 1

The industry life cycle would be as below if Apple and Samsung merges and the impacts of two organizations are provided:

1. Start-up Stage: In this start up stage the products and its features would be planned and decided by Apple and Samsung. The distribution channels are yet to be developed after that only the product would be set for the promotional activities. The companies would invest on budget and ensure to handle any financial risk and they would have a deal accordingly.

Impacts and Effects: Differentiation strategies are the approaches which businesses use in order to distinguish itself from its rivals and competitors. While introducing a product it is quite important to focus on differentiation to flourish and sustain in the competitive environment, so there will be a problem with the companies to decide on what needs to be differentiated in the mobile phones.

2. Growth Stage: In this stage the product would slowly be penetrating into the market segments. The demand and the price would be deciding accordingly as where when demand increases the price decreases and when the price increases the demand decreases.

Impacts and Effects: In order to establish a monopoly this focus strategy is applied which focuses on a specific market, it can either a focus differentiation strategy or focused cost leadership strategy. When a firm is in growth stage it has to narrow down its target market and customers in order to sustain. The company will have a problem when it is merged as where the customer will get confused on the mobile features and that affects both the company’s focus strategy.

3. Shake out Stage: In this stage the business which is not grown in the market would be eliminated in this stage as where the customers will not show interest towards the products. Some company would merge with other companies in this stage to capture the market.

Impacts and Effects: Cost leadership is the strategy where the organization using the lowest cost in terms of production and delivery of goods without compromising the quality. In this shake out stage price reduction would be a tool to sustain in the market and that affects both the company’s growth and profit which will increase their financial risk.

4. Maturity Stage: In this stage the industry would have captured the market and it reaches a saturation point. The competitors would be analysed in the market and the organization focus to increase its profit.

Impacts and Effects: When the product enters the maturing stage the customers would expect more value than the introductory stage and hence focus needs to be on this. The companies will have a problem in marketing as when it is merged the niche customer would lose their hope towards differentiation, cost etc.

5. Decline Stage: In this stage the industry deals with decline, if the company faces huge losses they would close their business, some companies would acquire small competitors to be a market leaders.

Impacts and Effects: The companies when merged it is not always leads to profit as where the customers will not like the products and the company may face towards high risk on the business to sustain in the market.