Products and
businesses move through the very same cycles and growth and decline. To help
businesses rejuvenate their market relevancy often requires the revamping of
both their products and operations. A paper by Cao and Zhao (2010) describes
how internal components like IT and technology products need to be revamped to
maintain market profitability. The paper describes the stages of growth and
decline that help organizations formulate the process of improvement.
The concept
of product life cycle was originally proposed by Raymond in 1966 and has since
been expanded to include other areas of production as well as technology
products. The researchers William Abernathy and James Utterback went on further
to discuss the concept of “patterns of
industrial innovation”. Each of the products, services, and companies have
patterns when developing, growing and declining.
The argument
fits into Schumpeter’s explanation of the long tail that has been later dubbed
the S curve. Breakthroughs are often followed up by rapid productivity and
research the leads to increased profits and ends in a market decline. These
phases can be seen prototype, emerging, maturing, established and outmoded stages
(Baker 1989). New technology is
capitalized on and then starts moving toward decline where new technologies
must take up the vanguard of growth.
New
technologies are not hiding from competitors for long. Other companies will
adopt and adapt the technology to also receive financial benefits. This transference
serves a purpose in the development in society as each company and person
applies their own knowledge to the product create greater variability and
market application. To stay competitive, companies must continually develop,
adapt, and create to maintain market position. One can think of how the technology from the electronic
transistor eventually made its way into television, compact discs and notebooks
through the adaptations of many companies.
The author’s
used the example of Motorola’s IP Management of the mobile (GSM) system.
Eventually this system was adopted, adapted, and used in other places. New
systems developed that were more effective. The process of development is
continual and companies will constantly seek to learn from each other and put
new developments into the market. Patents can slow and protect products for a
short time but the process of information diffusion will continue regardless of
a company’s best efforts.
Comment: Companies that seek to maintain a
high position in the market will need to continually develop new products and
then capitalize on those new products to create financial revenue streams. Companies
develop, grow, and decline in the same way as technology products hit the market
but eventually loose steam. Those companies that desire to maintain their
market relevance will need to continually rejuvenate themselves. Companies
within a hub learn and copy from each other as information and employees
interact among semi-permeable borders.
Baker, H. (1989).
The technology life cycle. Best’s Review,
90. 66-72
Cao, Y.
& Zhao, L. (2010). Intellectual property management model in enterprises: a
technology life cycle perspective. International
Journal of Innovation and Technology Management, 8 (2).
