The Product Life Cycle in Relation to the Diverse Activities and Interests of Various Stakeholders - Essay Example

Satisfying all stakeholders when the business is competing in mature product markets is difficult”. Discuss. By History of University] [Date] A stakeholder refers to an independent entity with a stake or concern in a business undertaking. Stakeholder groups differ from one entity to another and consequently they are interested in diverse aspects of business activities (Cunat & Guadalupe, 2005). Dissimilar and competing desires attributed to stakeholders, conflicts of interest in businesses are created. These needs it will be difficult for any entity to satisfy part of the stakeholders without compromising the interests of others. The principal stakeholders include the shareholders, securities exchange and players in it, employees, government, competitors, suppliers, creditors, agents, dealers, environment and customers of a business among others. This paper intends to examine the product life cycle particularly the mature phase, in relation to the diverse activities and interests of various stakeholders. The basis of this survey is to narrow down the best mechanisms, in which the stakeholders of a market niche can be satisfied (Mitt, 2010). The Product Life Cycle refers to theory, which management applies to facilitate businesses understand the product’s eventual life expectancy and being able to know the standing in life of a product at a given time. Most products undergo four principal phases in the life namely: the introduction, growth, mature or decline phases. Identifying of the phase of the product cycle enables respective stakeholders to derive strategies intended to improve the performance of the respective products. It is however, hard to identify the exact phase in which a product belongs in the product life cycle as a rise or fall in market performance sends mixed results (Goffin & Mitchell 2005). It is also not clear if stakeholders can accurately predict when the product will go into the subsequent stage of its life cycle. It is also hard for a business to ascertain when the market for a given product will reach market saturation. The management may thus get to know this during saturation and after saturation. The product life cycle model assume all products have a life limit, which might not be the case since, during the saturation phase the product starts slowing down with little or no significant growth (Mitt, 2010). It is significant to note that, businesses are required to work strategically to make profits, employ many people, pay taxes to the government pay dividends to shareholders, improve wealth, and be responsible to the community. All these are reasonable expectations that stakeholders demand from businesses yet businesses are expected to uphold business virtues and norms. A mature product market has the following features: such businesses are expected to develop institutional and legal frameworks for the sector in the economy. In addition, they are required to implement initiatives, aimed at developing the public governance on the state. (Goffin & Mitchell 2005). This is because the state is one of the numerous stakeholders in the market niche. This trend enhances strengthening of other stakeholders in the respective sectors and motivating social responsibility through corporate social involvement. Despite doing all these; businesses are required to serve the needs of customers and consumers provide worthy employment to its employees, give adequate returns to shareholders, purchase goods and services needed for production, compete fairly, form strategic alliances, pay taxes and be socially responsible (Goffin & Mitchell 2005). It is not possible to achieve al this since the business needs to design a market strategy, which will address the diverse interests of the various stakeholders (Hill and Jones 2012). At the same time, management will have to consider other factors in the business environment that influence marketing strategy like demographic, political, economic, socio-cultural and technological aspects. The management should evaluate its marketing strategies and those of other contenders in the markets strategic positioning, in the market niche. This will result to sustainable customer loyalty towards the firm’s products and services. This can be achieved by matching the firm’s yield and services with the available opportunities and threats in the market place (Goffin & Mitchell 2005). The diverse interests of the stakeholders do not enable the management of a business entity to match between key requirements of the market and the existing strengths of competitors, when the market is optimum (Dess, 2012). This will require investment in some product lines that are doing excellent and sometimes withdrawals in areas that are not doing well, to benefit from the opportunities accessible by strategic windows. On the other hand, the businesses at the maturity level are better placed to handle the challenges presented by the stakeholders. In addition, such businesses identify all the stakeholders, analyze the diminutive and lasting interests and calculate the possibility of influence the strategy (Dess, 2012). Influence in this case would reflect the stakeholder’s virtual influence over and within a firm and the degree to which the business cannot be considered thriving if a stakeholder’s desires and expectations are not addressed (Mitt, 2010). The stakeholder analysis enables managers to attain excellent understanding of the array and variety of stakeholders who have a vested concern in the organization. The managerial stakeholder should start by analyzing the business’s mission and vision (Mitt, 2010). This facilitates clarification of the business’s principle rationale intended at satisfying the needs of its key stakeholders. In addition, it analyzes how the cardinal stakeholders affect the mission and the vision if they are ignored at this market stage. Stakeholder analysis enables managers to identify parties that might upset otherwise well-formulated strategies, such as local, national, or foreign governmental bodies (Mitt, 2010). Similarly, the stakeholder’s analysis prompts firms to better the creative skills in implementing and monitoring the applicable strategies. At this business mature stage business often have overly broad and bulky lists of stakeholders; it is significant to establish that, the stakeholders who are based on how the business’s market strategy, influences the stakeholders. Evaluation on the probable stakeholder having a direct influence on business performance is fundamental in any product cycle strategy (Mitt, 2010). The second stride is to appraise the extent to which a stakeholder can exercise control and influence over the key decisions of the firm. The business at this mature stage will come up with strategies to satisfy the need s and interests of the stakeholders. The organization may start by creating its market environments than using existing structures (Mitt, 2010). Identifying strategic opportunities and threats that enhance, widening of the firm’s market niche is fundamental in meeting the needs of the perceived face of the environmental turbulence (Mitt, 2010). How well do the organization’s products and services meet the desires offered by the windows of opportunities? It is note worthy that; threats are a perfect start for coming up with marketing strategies. It impinges factors internal and external to that need to be explored subsequently. The health of a product mix of a firm, during saturation phase needs appropriate strategies such as differentiating its products and bringing new products altogether. Businesses may use product portfolio models such as the Boston Consulting Group (BCG) matrix and the Directional Policy matrix to evaluate the relevance of the used strategies (Hill, 2010). The strategies discussed there in helps the management to relay the necessary knowledge the stakeholders. This facilitates easy understanding of the business structure, which includes detailed current information on performance like the actual cost of sales, proceeds, expenditure, firm’s structure, administration style and other factors like emerging business trends and the findings of an industry analysis in order to help the stakeholders match the expectations. Concentration should be given to how firms define the marketing strategies and analyze the competitive positions occupied by rival market players. Consideration should also be given to the diverse sources of information accessible to firms, which facilitate them to measure competitors’ strengths and weaknesses (Mitt, 2010). Competing successfully depends not only on the aptitude to spot customer desires, but also on the knack to satisfy the needs better than the competitors (De &Pearce, J. A. 2009). This implies that organizations should endeavour in finding ways of attaining differential rewards in the eyes of the customer. The differential advantage is often attained through the product or service. However, it may be attained through other elements that form the marketing mix. References Cunat, V., and M. Guadalupe (2005), “How Does Product Market Competition Shape Incentive Contracts?” De, K. C. A., & Pearce, J. A. (2009). Strategy: A view from the top (an executive perspective). Upper Saddle River, N.J: Pearson/Prentice Hall. Dess, G. G. (2012). Strategic management: Text and cases. New York: McGraw-Hill/Irwin. Goffin, K., & Mitchell, R. (2005). Innovation management: Strategy and implementation using the pentathlon framework. Hound mills, Basingstoke, Hampshire: Palgrave Macmillan. Hill, C. W. L., & Jones, G. R. (2012). Essentials of strategic management. Mason, Ohio: South-Western/Cengage Learning. 833-913. Journal of the European Economic Association 3, 1058-1082. Read More