Table of
Contents
List of Figures
Figure 1
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Sustainability Management
Increasing
environmental impacts and resource use associated with accelerating
developments and growing global populations make it evident that engaging in
businesses, as usual, do necessarily result in the achievement of sustainable
futures. Planetary boundaries which define different safe operating spaces have
been crossed because of different activities that humans engage in. Often
people get to see new products come into the market. These products slowly
evolve; they get their market share acceptance and then ultimately disappear
from the market. Most products live their lives, develop, grow old and
naturally do not remain the same. Product Life Cycles outline the journeys
products traverse in their lifetime from the time they are introduced in the
market up to the time they phase out (Aytun & Kılıçaslan, 2017). Hon Hai
Precision Industry Co., Ltd. is the best example of a company in this context
with a product life cycle management strategy (Market Screener, 2018). Apple
iPhone is the best example of a product that the company engages in its product
lifecycle management (Więcek-Janka et al., 2017). Companies should incorporate
sustainability because of sustainability management and development of
different products that a company manufactures or produces positively
contribute to the justifiable development of society and the economy.
Hon Hai Precision Industry Co., Ltd. Apple iPhone's Life Cycle Management
Apple iPhone as one of the unique
products manufactured by Hon Hai Precision Industry Co., Ltd. undergoes through
four different stages in its life cycle management (Więcek-Janka et al., 2017).
The four stages are introduction, growth, maturity, and decline. These four
stages outline the journey Apple iPhone traverses in its lifetime from when it
is introduced in the market until the time it completely phases out. The current product of the company
is better than previous products because it was able to engage in value-added
and high volume manufacturing at costs that are reasonable. As of December
2018, the company had revenue of USD 5,293.80 billion and a gross profit of USD
332,029.90 million (Hon Hai Precision Industry Co., Ltd., 2019). The company
also engages in the development, design, and manufacture of heat transfer,
nanotechnology, material sciences, and wireless connectivity products.
Figure 1 : A Diagram Representing the Apple iPhone’s Life Cycle
(Saxena,
2018)
Figure 2: A Diagram Representing Apple iPhone’s Cycle Stages
(Saxena, 2018)
Apple iPhone's Introduction
Stage
The
introduction stage is where the product is launched or introduced to the market
(Borna & Wahlers, 2018). At this stage, the prices of the product are kept
very low to capture and attract the maximum market share, more so, mass
products. The strategy is very different when it comes to Apple iPhone since it
is a high-end product. In Apple iPhone’s introduction stage, the prices are
kept high to assist in maintaining ownership exclusivity. Most iPhone users do
not like it if every person owns an iPhone and this makes the prices to be kept
high to attract few individuals. The sales, marketing, and advertising costs
remain high during this stage. iPhones that were
introduced by the company in the Introduction stage in November 2018 are iPhone XR and XS. iPhone XR was able to make
up 39% of the company’s total sales while
iPhone XS Max and XS made up 26% (Torres, 2019). Combined with low prices, Apple
iPhone’s introduction stage contributes to a period of losses for the company.
The company spends a lot of money to create different marketing and advertising
campaigns for the product and to hold conferences. In Apple iPhone’s
introduction stage, the product fails to make profits.
Apple iPhone's Growth Stage
In most
cases, by the time different products go into the growth stage, the targeted audiences
already start having certain affinities towards them. Most companies in this
stage will try to maintain the quality of the product to ensure that they do
not disappoint their audience (Borna & Wahlers, 2018). Concerning marketing,
most companies will start to spend more money at this stage to reach out to
wider audiences and become top brands among different target groups (Clark,
2017). As a result of the product, the company’s marketing activities and its
reviews, the sales of the product in the growth stage are expected to increase sharply.
In Apple iPhone's case, the product launches help to attract more sales which
add to the product's overall sales volume. Every iPhone model manufactured by
Hon Hai Precision Industry Co., Ltd. undergoes different stages of the Apple
iPhones’ product life cycle (Saxena, 2018). The Apple iPhone in the growth
phase acts as the successor of the latest models and its different variants. iPhone X was in the growth stage in had 50% higher volume
compared to iPhone XR in 2018 (Allegro, 2019). The
newest model will be nearer to the introduction, the earliest models nearer to
decline and the middle models will be nearer to maturity.
Apple iPhone's Maturity Stage
During the
maturity stage, the sales’ rate of increase can reduce as the overall sales of
the products are sustained at certain levels (Borna & Wahlers, 2018). At this phase, many competing products tend to enter the market. In some cases,
the competing products can either be a replica of the company's products or genuinely
good products. iPhone 8 was in the maturity stage in
November 2018 were expecting increase in sales. Mid-generation of the
Apple iPhones will be in the maturity stages since here the sales would have
stabilized.
Apple iPhone's Decline Stage
In the
decline stage, the audience starts to move on to other better things (Borna
& Wahlers, 2018). The audience no longer
wants the company’s products because they have nothing interesting as compared
to different products which are now in the growth or introduction phase. Most
products that reach the decline phase have become technologically outdated or
obsolete (Schulz et al., 2014). Some
of the tactics that most companies implement during the Product Life
Cycle management to benefit from their declining products include discounting
the product, lowering prices, and eliminating after sales support to minimize
costs associated with personnel and marketing. iPhone
6, 7 plus and 7 were at the decline stage in November 2018 were the oldest
iPhones with prices that range from $80 to $305 (Silver,
2018). As for the case of the Apple iPhone, Hon Hai Precision Industry
Co., Ltd. lowers its prices and discounts the product to benefit from the
product before it phases out.
The Impact of Sustainability Management at the Apple iPhone's Product Life Cycle
Apple iPhone's Introduction Stage
Sustainability
management in this context helps Hon Hai Precision Industry Co., Ltd. to come
up with the best marketing strategy for the product. In the case of the Apple
iPhone, rapid skimming would be the best marketing strategy since it involves
launching products at high promotional levels and prices (Du & Chen, 2017).
With the help of sustainability management, the company is able to establish a recognized brand identity, set up or
provide consumer tests, connect with some of the right partners who will help
to promote the product, and price the products as high as the company believes
it can sell it while reflecting the quality level it is providing. For the
Apple iPhone, limiting it to specific consumers can help boost its demand.
Apple iPhone’s Growth Stage
With the
help of sustainability management, companies can easily increase their profits
in the growth stage (Alberti & Varon Garrido, 2017). In Apple iPhone’s
growth stage, sustainability management would help to improve Apple iPhone’s quality,
enter different market segments, add new support services or product features to
grow its market share, and keep its price as high as possible to keep profits
and demand high (Etale, Bingilar, & Ifurueze, 2016). Sustainability
management in the growth stage also helps to increase distribution channels of
Apple iPhone to manage the growing market demand, skimming the price of the
product if the profits realized are low, and shifting marketing messages.
Sustainability management at this stage also helps the company to maximize
different opportunities that result in rapidly rising profits, sales, and
market share.
Apple iPhone’s Maturity Stage
At this
stage, sustainable management will assist the company to change its marketing
strategies to prolong its product’s life cycle (McDonagh & Prothero, 2014).
Some of the main strategies that can help to extend the life cycle of the
product in this stage include product and market modification (Reguia, 2014). Market modification involves different
strategies such as converting non-users, redefining target markets, winning
over the customers or clients of competitors, and entering different market
segments. Product modification, on the other hand, revolves around improving or
adjusting the features of the products, pricing, quality, and making it
different from other products.
Apple iPhone’s Decline Stage
Sustainability
management in this stage helps Hon Hai Precision Industry Co., Ltd. to save
money since it will be witnessing a decline in profits and sales. The decline
in the sale of the Apple iPhone mostly results from changes in the preferences
of consumers, alternatives available on the market and technological advances (Felix,
2015). With the help of sustainability management, the company will be able to
reduce its promotional expenditures, the number of distribution outlets selling
the product, and implement price cuts which will help to persuade customers
into buying the product (Bloomberg, 2018). Sustainability
management has helped the company to improve its financial strength including
current ratio and quick ratio, and also the profitability ratios in terms of
gross and operating margins. Five years ago the company had a growth rate of
16.79 whereas in 2018 it recorded a growth rate of 25.01 with revenue of USD
1,004,526 in the industry (Hon Hai Precision Industry Co Ltd (2317q.L), 2019).
All these strategies ensure the company maximizes its profits. .
The Key Considerations in Carbon and Water Footprint Analysis
Concerning
Hon Hai Precision Industry Co., Ltd. and the manufacture of Apple iPhone, some
of the critical considerations in carbon and water footprint analysis revolve
around climate change, use of resources and safer materials (Apple Inc., 2018). When it comes to climate change, the
company aims to reduce its impact on climate change through the use of
different renewable energy sources. Another way through which the company
reduces its effect on climate change includes driving energy efficiency in its
facilities, products, and supply chain. In terms of resource usage, Hon Hai
Precision Industry Co., Ltd. aims to conserve some of the most precious
resources so that humanity can thrive (Annual Report 2017, 2017). Through the increase of the company’s efficiencies, carbon
and water footprints can be easily reduced. Sustainability data of carbon
footprint and water help the company to measure gas emissions which result in
climate change. In the year 2016, the company recorded a carbon footprint of
29.5 million metric tons when compared to 2015 with 38.4 million (Apple Inc.,
2018). Some of the factors that resulted in the 23% decline revolve around the
benefits of the company’s environmental programs including reduced emissions
(Apple Inc., 2018). Electricity usage when processing raw materials, assembling
products and making parts is the company’s largest contributor to its carbon
footprint.
Conclusion
In
conclusion, companies should incorporate sustainability because sustainability
management and development of different products that a company manufactures or
produces positively contribute to the justifiable development of society and
the economy. To carter for some of the future uncertainties, companies should
adopt different product lifecycle management strategies. These strategies help
in the management of the lifecycles of various products from inception, through
manufacture and engineering design, to disposal and service of manufactured
products.
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