Indicate how a company could apply the concepts, making generic recommendations.
In the present time of 21st century the business practice has progressed in a significant fashion. The continuous emergence of technologies, global competition as well as limited product life cycle has a tremendous role in this context. The above mentioned factors force the organizations to be critical in respect to the budget as well as resource allocation. The major ways to achieve success for the organization to consider the choices in a well suited fashion. In the current days the portfolio management is the most effective business approach of the decision making approach conducted by senior management. The senior management deeply focuses on the decision making systems in respect to product management for investment, implementing appropriate strategies for products as well as resource allocation. In order to explore the product portfolio management along with product lifecycle, Samsung has been chosen for further evaluation.
The product can be referred as the physical as well as intangible goods and services which are produced or served to sell to the customers. Majority of the consumers consider the product as the tangible, physical as well as sellable. Although the above described perception is rightfully fitted only with the tangible product, the services as well as intangible products are also included in the definition of the product (Kahn et al. 2012). For instance, the mobile software is basically an impressive example of products. Though, it is intangible, it cannot be considered as service product. On the other hand, the services are referred to the processes which are considered as a range of activities which are highly effective for providing the necessary results to the customers.
According to Evanschitzky (2012), the products consist of several vital attributes which will be most effective for meeting the expectation of the customer and generate consumer satisfaction. These attributes are functions, features, uses as well as benefits. The product variant is highly necessary for the satisfaction of customer by meeting various kinds of requirements of the customers regarding single customers. Samsung can meet different need of the customers without changing the product profile. The product portfolio is expanded in an effective fashion with the help of product variant as the products can be sold in a parallel system in the real time. Product variant can be also considered as the alternate forms of individual product.
At the same time, product configuration is considered as the response process to the multiple offering to the customers. These customer offerings consist of several crucial components which defined in a prior fashion. The configuration of the product is regulated with numerous constraints as well as rules. The product configuration also consists of suitable amount of options as well as variants (Kahn et al. 2012). There are various different mobile companies in the market who initiates the product configuration buy offering solution product which is nothing but combined with hardware as well as services. It has been observed from the extensive study that Samsung tend to experience a greater amount of profitability by offering the solution product.
Concept of Product Portfolio:
According to McNally et al. (2013), the product portfolio can be considered as the collection of various projects aiming to generate temporary servicing efforts, product as well as results. For example, several programs which are focused to gain crucial benefits can be considered as the product portfolio. On the other hand, the portfolio can also contain numerous type of maintenance work. Samsung extensively focuses on the customers’ satisfaction therefore, various after sales service are considered as the product portfolio. The major purpose of the product portfolio is meeting the strategic goals of business through creating the possibility of effective management of the work. The items of the product portfolio must be quantifiable which means the product needed to be prioritized, ranked as well as measured. In respect of organizational context the portfolio is referred to the all of the company’s product.
The product portfolio is deeply related with the other items according to a certain product hierarchy. There are several attributes which are highly important for the solutions, product portfolio, product, product line, and product platform as well as product element. There are several products as well as product line which form the product portfolio. Samsung focuses on various industries with a greater variance of product range. The company deals with chemicals, apparel, consumer electronics, precision instruments, electronic equipments, telecommunications equipment, ships as well as semiconductors. The company has been popular for providing a higher number of services such as construction, advertising, financial services, entertainment, technology services regarding information and communications retail, hospitality as well as medical services. There are different parameters of the product within the product portfolio which are targeted market products, types of products as well as methods of manufacturing of the products. The principle for organizing the products highly depends on the varying organization (Martinsuo 2013). The product lifestyle states are ranged from developing stage of products as well as ramp down stage of products.
Various Models of Product Portfolio and their Implementation:
The product portfolio analysis is a technique which is used to analyze the environment of the organization. As stated by Beuren (2013), the portfolio of the product is expressed by the set, collection, assortment, range and group. As argued by Mahapatra (2012), the biz portfolio is a collection of the products, markets, branches, divisions, income generation and assistance. It has been noticed that the portfolio analysis is usually applied in the organization with multiple products, customers’ categories, markets and division. The product portfolio has been analyzed by different models and theories such as Boston Consulting Group (BCG) model.
Boston Consulting Group (BCG) model:
Boston Consulting Group model is the most popular business portfolio matrix. The business portfolio has been analyzed along with the relation to the market share and market growth. It has been observed that the range of the market share and growth is from low to high. It has been observed that SBU is positioned in the model and the strategy of the organization.
There are four different segments in the BCG section such as Stars, Cash Cows, Dogs and Question marks.
As stated by D’Amico et al. (2013), the high growth products are notified by the stars. In the context of electronics industry Samsung has been observed to be faced with a greater competition. The present study has been effective to indicate that Samsung Galaxy ‘S’ series as well as Samsung galaxy Note is the most profitable product. Therefore, it is situated at the Star quarter of the BCG matrix. These products are popular as they belong from a high growth market and hold an extensive amount of market share. In order to maintain the large share of market Samsung is bound to require a huge amount of investment. The products are heavily related with the consumption as well as generation of the cash. However, Samsung must maintain a strict strategic approach; otherwise the star products will become Cash Cow products.
Cash Cows:
As stated by Lee et al. (2016), cash cows are the low growth products which have a high market share. The Cash cows products are mainly considered as the future Star products in the market. According to various scholars the Cash Cows are treated as the foundation of the entire company. Therefore, Samsung greatly focuses on the strict economic investment on the Cash Cows products. Samsung mostly extract profit from the Cash Cows products with a very little investment on these products. Therefore, the Cash Cows products play a significant role in the product portfolio of any company. The major Cash Cow products in the contemporary market are Samsung galaxy Ace, Samsung galaxy young as well as Samsung Champ.
Question marks:
It has been observed that the question marks are products with low market share operation in high growth market. It has been noticed from the various amount of study that these products are renowned for resource consumption along with generations of little resources in return. It is believed by various scholars that the limited range of Question marks products are major factor the positioning of the product in the market. It is evident that every company comes to the market with a problem child product. However, the strategic approach defines the success of organization to transform their problematic product into star product. On this journey it is natural that several products will turn into Question marks products. Samsung has a very limited range of Question marks products within their product portfolio. The major Question marks products in Samsung are Samsung galaxy grand and Samsung Tablets. The organization has suggested that they have the potential for the substantial investment to grow market share at the expense of larger competitors. As stated by Hauschild (2013), the management has to think about the question marks such as:
• Which one should they invest in?
• Which one should they allow to fail or shrink?
It has been observed that the question marks are creating problem for the beginners. The new market entrants have generated low profit but need a lot to tap the high growth rate. As argued by Hanks (2015), the organization has faced the liquidity problems for their commitments.
Dogs:
The term “Dogs” refers to the products that have a low market share in unattractive low growth markets. Evanschitzky (2012) stated by the dogs may generated enough cash to break even but they are rarely worth investigating in. it has been observed that the gods are usually sold or closed. It is common believe within the scholarly sector that dogs products are considered as the cash traps of the organization. The products are not liable for generating the cash for the company. Samsung therefore attempts to shun the products with a significant fashion. The major product of Samsung is Samsung CDMA Primo.
Samsung is able to perceive the strengths as well as weaknesses of the products with the evaluated BCG map. The main approach of the BCG matrix is the profitability as well as the likely cash flows. The company deeply relies on the relative market share as an indicator of the management of the cash flows. Another effective indicator of the cash usage was the rate of market growth.
Concept of Product Lifecycle Management:
The product lifecycle management is deeply related to the decisions of the company in a direct or indirect fashion. According to Kahn et al. (2012), the management of product lifecycle can be effective considered as the comprehensive issue of management. The product lifecycle management is considered as the responsibility of the overall organization rather than a single stakeholder. Product lifecycle deals with the product maturing duration from the starting point to the end at the obsolete age of the product. The major objectives of the product lifecycle management are increasing the revenues of single product, maximizing the current and future product’s value, decreasing costs as well as maximizing the product portfolio value.
The major component of the product lifecycle management is product as it helps to develop the revenue for the organization. Samsung is highly enabled to manage the entire lifecycle through the product lifecycle management system (Mahapatra et al. 2012). The management system of Samsung is also quite effective for focusing on the relevant issues with the appropriate supply of the information. The managers of Samsung can get a significant transparency as well as better perception regarding the entire lifecycle of the products through the product lifecycle management. In addition to that, Samsung is also able to trace every action taken in the context of product with the respective management approach. The product lifecycle management is also capable of shortening the time-to-market duration of the product along with enhancing the quality which result a better competitive advantage for Samsung. Another major advantage of the product lifecycle management is an enhanced channel of communication system as well as impressive supply chain process.
The model will eventually need an ample amount of potential product idea in the planning stage. The product from the mature stage is the major source of the cash flow for any given organization. For example, in case of Samsung, Samsung Galaxy Core model is providing the profit as mature product. In addition to that there are several products which would be just introduced in the market which will raise a negative cash flow. For instance, there are several products of Samsung which are introduced in the contemporary market. These products are Samsung Galaxy S5, Samsung galaxy Avent as well as Samsung Galaxy Alpha. At the same time the product from the growth stage will raise a limited amount of cash flow. Considering the case of Samsung the products which belongs from growth stage are Samsung Galaxy Grand 2 and Samsung Galaxy S4 mini. There are several other products in the product portfolio which are not able to generate sufficient cash flow. These products from the Samsung product portfolio are Samsung Galaxy Ace and Samsung Galaxy Star. The company must decline this kind of retiring products. There are also several indicators which are highly effective for analyzing the product lifecycle. These indicators are time to service, time to react, time to volume and time to market.
The organizations are popular to provide the after sales service associated with the sold products. The service lifestyle is considerably long in comparison with the product lifestyle.
Product Portfolio Management in the contemporary market:
Archibald and Archibald (2015) has defined the portfolio management as a number of tools supported management that are selected for gaining the best possible value of the product in the market. The BOSTON matrix that segregates the products of a particular company into star, cash cows, question mark and dog is one of the tools used for measuring the importance or value of different products manufactured by a single company.
Purpose of product portfolio management:
Maintaining a positive attitude towards the competitive and risky business environment has become a necessity in the current market. Samsung has understood the importance of managing the portfolio of the products to make it a prioritization among the other products or services available in the market.
Samsung mostly uses premium pricing strategy in the case of introduction stage products. The company always launches a product with a high amount of price in the market. This introductory product is the centre of customer attention due to the impressive brand image as well as advertising strategies. However, in the growth stage of product, Samsung reduces the cost of the products so that the products continue the cash flow (Schultz et al. 2013). However, the reduction of the prices will depend whether the product becomes Star products or Cash Cows. These stages of the products are regarded as the Question Marks products.
At the time of achieving maturity Samsung halts the reduction of the product price. These products produce the most generous revenues for the company. Often it is observed that the products do not get the necessary popularity and produces very little cash flow. Samsung greatly depend on the skimming price to earn the maximum amount of revenue from these kinds of products (Hanks 2015). There are several products which have not been able to gain enough popularity in the market. These products are considered as Dogs product and company tries to sale as much as possible with a very low profit margin.
Impact on competition on PPM and PLC:
The contemporary competitive market has immensely impacted the PPM as well as PLC of Samsung. The company is forced to launch a high number of products as there are several rival companies which produce several competitive as well as attractive models (Mahapatra et al. 2012). The competition also ensures a very short product life cycle for the products of the company. As the customers have a great opportunity of selecting from a versatile substitute product range the company is driven to continuously change the model of their product. This affects the existing models which turn into the decline stage as they cannot get the necessary attendance.
Specific Customer segments of the PLC:
At the time of introduction stage Samsung targets the rich customers. The premium pricing strategy is highly effective at the introduction stage as the introductory products get the most attention of the customers and has the potential to earn maximum amount of revenues. At the growth stage the company targets the young as well as tech savvy customers (Martinsuo 2013). These customers are able to provide enough cash flow to the company. The mature products mostly target all kind of customers in the market irrespective of their age, economic condition as well as gender. The declining products will be able to reach the customers who are low economically. The reduced price attracts the these kind of customers in a significant fashion.
Conclusion:
The above described paper has been able to successfully explore the product life cycle in an effective fashion. The management of portfolio of the organization’s products is quite similar with the portfolio investment. The overall strategy of the organization is represented through the organization’s portfolio. There are several responsibilities which are highly required for the effective management of the portfolio. These responsibilities are active management of product portfolio, balancing ability of portfolio, constant reviewing, along with performance measurement. The budget allocation is considered as the extreme implementation of decision making of product portfolio. In the same context, the lifecycle management is referred to the activities which are related to the management of different lifecycle phases of the products.
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