Topic 1: For a new product of your choice, plan how you would devote resources to it over its life cycle and what kinds of revenue flows you would expect it to earn at each stage.
A new product can be an upgraded version of the current product with new features or it may be very different from something which is already there in the market. However, there are numerous marketable risks linked with them like adaptation of new idea or existing designs.
Many new products fail in the commercial market due to lack of proper planning and allocation of resources. Perhaps this problem may be solved by knowing the market in terms of perceived needs of the customers.
According to Stark (2015), product life cycle is an effective model which is widely used by every organization in order to identify the actual product position in the market efficiently.
The product portfolio of any organization lies in different four stages such as introductory stage, growth stage, maturity stage and declining stage. In addition to this, Restuccia, et al. (2016) also elaborated that introductory stage also help in developing the product awareness and development of product market at the initial period of the product in competitive market.
The second stage is a growth stage which is characterized as a growth level of sales and profits. Moreover, Ward (2016) also stated that maturity stage is a stage which depicts that company has achieved high position in the market with the help of product i.e., established a well-known place in a market. In a declining stage, sales and profit declines at low which means that product is demanded less in the market.
Further, the company Patanjali allocates its resources on product life cycle on the basis of resources demand by the customers. Like product category like soap, cosmetic and consumable products are allocated at introduction stage as they are not still highly demanded. In growth stage, ghee and medicines are some goods which are highly demanded by customers.
In concern to this, in introduction stage, revenue generation is limited because at this stage product is introduced in the market and customer whereas in growth stage, revenue generation is frequent because growth stage products are regularly demanded by the customers. In opposite to it, in maturity and declining stage, company faces difficulty to generate the revenue as product demand falls.
While analyzing this case study, it is found that Patanjali Company has big product and service portfolio that it serves or offers to its customer in wider market size all around the world. Mostly, there are large numbers of Patanjali products which are at introductory stage because company is developing innovative product by doing continuous research.
In product life cycle of Patanjali, Ayurvedic products are developed and sold to customers so that they get aware more about their health diseases efficiently (Das & Mandal, 2016). In introductory stage, consumable and medicine products are produced and sold at an initial stage where product is advertised for customer awareness.
The growth stage of Patanjali is increasing rapidly in the market because there are some common consumable products that are widely used or demanded by the consumer across the world. But, in maturity and decline stage, there are no products that shifted from introductory or growth stage.
The improvement required in existing theory is that product life cycle should also be used in more efficient manner by developing a link with BCG matrix which helps in determining the market share and growth.
The use of BCG matrix theory will help in identifying the product which is performing well like Ghee and Dantkranti paste is Star products of Patanjali. This improvement in respect to the theory will lead to achievement of positive result i.e., understanding and analyzing the product portfolio efficiently.
Das, P. & Mandal, D. (2016). Patanjali. Research Report. Retrieved from: https://tejas.iimb.ac.in/articles/Patanajali_Tejas_Mar17.pdf
Restuccia, M., Brentani, U., Legoux, R., & Ouellet, J. F. (2016). Product Life‐Cycle Management and Distributor Contribution to New Product Development. Journal of Product Innovation Management, 33(1), 69-89.
Stark, J. (2015). Product lifecycle management. In Product Lifecycle Management (Volume 1) (pp. 1-29). Springer International Publishing.
Ward, J. (2016). Keeping the family business healthy: How to plan for continuing growth, profitability, and family leadership. USA: Springer.
In international market, senior managers face various challenges and threat to develop business with the growing economic power. In concern to this, senior managers of international companies are required to develop and use its skills and ability in order to face the challenges in an efficient manner.
According to Paramati, et al. (2016), emerging market performs well when economic growth is speeding up simultaneously by responding towards the development and improvement in the global economy through foreign direct investment.
For developing market position, senior manager of multinational companies is required to develop effective strategies which help in improving market reputation as well as market growth and size efficiently & effectively.
While analyzing, it is found that PESTEL framework is best suitable approach that can help the senior manager to understand the market in advance and prepare it for meeting the future challenges and threats efficiently and effectively.
Through this framework, political factor are analyzed in order to determine the political power behind the increase in economic power of the emerging market (Song, et al. 2017).
With the help of this framework, legal, economic, technological, social and environmental factor help the senior manager in analyzing the external market environment that are creating opportunities for the manager to grab in order to develop the business market share and size in the competitive environment.
The case study is related to the challenges which McDonald faced in emerging market in different countries. This case study helped in identifying the problem and opportunities which company faced in emerging market due to their growing economic power.
The challenge which CEO of McDonald faced is unfavorable condition of the market for the non-vegetarian products like fatty food or beef are affecting the growth of the business directly due to development in the growth of an international market (Campbell, 2011). In respect to this, economic and social factors are major elements that affected the company performance in emerging market.
The increase and change in customer demand is somewhere needs to be considered by the company in today’s developing competitive market. The senior managers of the firm need to adopt these factors to be successful in the emerging markets.
From the above critical study, it is determined easily that senior managers of the international companies must need to understand the market condition and situation for an existing product.
The improvement to the theory will be made by analyzing the internal market environment with the help of Porter’s five forces model or by identifying strengths and weaknesses of the company (Eskandari, et al. 2015). This improvement in the theory will provide the advantage to the company to understand both internal and external market efficiently.
Campbell, A. (2011). Case Study: McDonald’s. Financial Times. Retrieved from: https://www.ft.com/content/c6940654-1918-11e0-9311-00144feab49a
Eskandari, M.J., Miri, M., Gholami, S., Reza, H. & Nia, S., (2015). Factors Affecting The Competitiveness of The Food Industry by Using Porter’s Five Forces Model Case Study in Hamadan Province, Iran. Journal of Asian Scientific Research, 5(4), 185-197.
Paramati, S.R., Ummalla, M. & Apergis, N., (2016). The effect of foreign direct investment and stock market growth on clean energy use across a panel of emerging market economies. Energy Economics, 56, 29-41.
Song, J., Sun, Y., & Jin, L. (2017). PESTEL analysis of the development of the waste-to-energy incineration industry in China. Renewable and Sustainable Energy Reviews, 80, 276-289.