A major concern for business leaders, particularly those participating in businesses that create value through innovative use of technology, is the shrinking product lifecycle. So much so that the term "instant markets" is being used to describe situations where a business opportunity pops up and unless you can capture it in an instant, you may be too late.
So while I had interpreted strategic moves by Apple as a business model transformation, the recent announcement of price cuts (with enhanced product attributes in iPod family) is making me think that the strategy is beyond providing luxury for the masses. I am tempted to think that Apple is merely responding to product life cycles that are increasingly shorter.
And it is not just the tech world that is a victim. Even the pharmaceutical companies that have patent protection are finding out that the actual number of years during which they can operate without any competition can be in single digits. (Related article: How to lower drug development cost?)
How can you respond to shorter product life cycles?
So while I had interpreted strategic moves by Apple as a business model transformation, the recent announcement of price cuts (with enhanced product attributes in iPod family) is making me think that the strategy is beyond providing luxury for the masses. I am tempted to think that Apple is merely responding to product life cycles that are increasingly shorter.
And it is not just the tech world that is a victim. Even the pharmaceutical companies that have patent protection are finding out that the actual number of years during which they can operate without any competition can be in single digits. (Related article: How to lower drug development cost?)
How can you respond to shorter product life cycles?
- If someone is talking about a business opportunity, it may be already too late to pursue it. In other words, be among the first one to talk about new things by trying to connect the dots yourself. So schedule time for such brainstorming and get all your good folks in a room for a couple of hours each month. (Related article: How to interpret market research data?)
- Dedicate resources to discovering new business opportunities. Companies like 3M and Google let their employees work on projects that they like to work on. Innovation is the outcome.
- Research and development (R&D) budgets must be adequate for your sector and competitive situation.
- The concept of what is "core" is changing. Both iPod and iTunes were not core to Apple's business.
- There are very few "toilet-paper" type opportunities now. Stop looking for them.
Recommended article: Value of business analysis