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    Business Strategy & Technology 143

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    iftekhar
    Business Strategy & Technology 143 ICAB

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    Business Strategy & Technology 143

    Uploaded by

    iftekhar
    5 views1 page
    Business Strategy & Technology 143 ICAB

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    Business Strategy & Technology 143 ICAB

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    5 views1 page

    Business Strategy & Technology 143

    Uploaded by

    iftekhar
    Business Strategy & Technology 143 ICAB

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 1

    Maturity phase

    • Maximise current financial returns from product.


    • Defend market position by matching pricing and promotion of rivals.
    • Modify markets by positioning product to gain acceptance from non-buyers (eg, new outlets
    or suggested new uses).
    • Modify the product to make it cheaper or of greater benefit.
    • Intensify distribution.
    • Leverage the existing customer database to gain additional incomes (eg, mobile phone
    operators seeking to earn from content management).
    • Engage in integration activities with rivals (eg, mergers, mutual agreements on competition).
    • Ensure successor industries are ready for launch to pick up market.
    Decline phase
    • Harvest cash flows by minimising spending on promotion or product refinement.
    • Simplify range by weeding out variations.
    • Narrow distribution to target loyal customers to reduce stocking costs.
    • Evaluate exit barriers and identify the optimum time to leave the industry (eg, leases ending,
    need for renewal investment).
    • Seek potential exit strategy (eg, buyer for business, firms willing to buy licences etc).
    • The response of competitors is particularly important – there may be threats as they attempt
    to defend their position, or opportunities, eg, when a competitor leaves the market.

    Professional skills focus: Assimilating and using information

    The phase that an industry is at in the industry life cycle will have a significant impact on strategy
    development. Use the scenario information to determine the appropriate phase thus enabling
    you to suggest suitable competitive strategies.

    Context example: Apple’s iPhone


    A company’s policy on innovation will be linked to its assessment of how the product lifecycle
    concept applies to its portfolio. Apple has tended to launch a new version of its iPhone device
    every 12 months. Each new version offers users more advanced features than previous models.
    Once older models of the iPhone have reached a certain age Apple has tended to withdraw
    certain elements of user support. In October 2016, Apple began warning users that support for
    32-bit applications using the Apple operating system (iOS) would come to an end. The
    announcement came amid Apple’s plans to move all of its future iPhone devices onto a 64-bit
    operating system architecture. In late 2017, Apple launched the iPhone X. In addition to the
    near bezel-less frame and wireless charging capability, Apple removed the iconic home button
    which had become a staple feature of the devices’ previous incarnations, to improve the users’
    visibility of the screen. In the most recent round of innovation Apple has launched the iPhone 12
    with 5G connectivity as well as the fastest chip currently available, upgraded camera features
    and improved water resistance. According to Apple CEO Tim Cook he believes that “2020 was
    our top year of innovation ever” including the iPhone 12, the Apple watch, the iPad and the M1
    processor in the MacBook Air. However, critics argue that the new iPhone 12 is merely keeping
    up with the competition rather than introducing radical innovation to the smartphone market.
    (Source: Hilliard, W (19 February 2021) Tim Cook: 2020 was ‘Apple’s top year of innovation’
    AppleInsider [Online] Available from: https://appleinsider.com/articles/21/02/19/tim-cook-
    2020- was-apples-top-year-of-innovation-ever [Accessed 17 June 2021]).

    128 Financial Accounting and Reporting - IFRS Standards ICAB 2024

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