Industry Life Cycle & Porter's 5 Forces Analysis of Taiwan Cellphone Industry
Industry Competition Analysis Midterm Exam
1. What is Industry Life Cycle Theory?
Please use global mobile phone (cell phone) manufacturing industry as an example to explain this theory. (50%)
Industry Lifecycle Theory describes the different phases of growth and decline that an industry moves through. In most examples of industry lifecycles there are either 4 or 5 phases as shown below: | | Typical 4 Phase Cycle | Typical 5 Phase Cycle |
The key difference is often how the early or embryonic phases are broken down. Using the global mobile phone manufacturing industry as an example the process would best break down into 5 phases as set out below: * Embryonic (Product Development)
At this point (1960’s through early 1970’s) the product has no supporting industry. It is so revolutionary that the technology is for essential uses only, medical, research, finance, and military etc. For example when mobile telephones were first introduced; they were heavy, bulky and even required a suitcase for the battery. The technology is (by today’s standards) very primitive. * Introduction
Introduction is the very earliest stages of a product being released to the general market. The unique product has been developed and patented, thus beginning a new industry (perhaps the reason why some industry analysis charts start here and do not include the embryonic stage which is more connected to “Product Lifecycles”). At the introduction stage, the firm may be alone in the industry. In this case, in 1973 Motorola was the first to introduce the concept of mobile telecommunications for the everyday consumer (even though it was still quite an elite group of people who could afford them). They began producing the first commercially successful mobile phone the Motorola DynaTAC.
At this point the life of the industry was still unproven and unknown. "Early adopters" and “innovators” needed to have the concepts relating to the product explained to
1. What is Industry Life Cycle Theory?
Please use global mobile phone (cell phone) manufacturing industry as an example to explain this theory. (50%)
Industry Lifecycle Theory describes the different phases of growth and decline that an industry moves through. In most examples of industry lifecycles there are either 4 or 5 phases as shown below: | | Typical 4 Phase Cycle | Typical 5 Phase Cycle |
The key difference is often how the early or embryonic phases are broken down. Using the global mobile phone manufacturing industry as an example the process would best break down into 5 phases as set out below: * Embryonic (Product Development)
At this point (1960’s through early 1970’s) the product has no supporting industry. It is so revolutionary that the technology is for essential uses only, medical, research, finance, and military etc. For example when mobile telephones were first introduced; they were heavy, bulky and even required a suitcase for the battery. The technology is (by today’s standards) very primitive. * Introduction
Introduction is the very earliest stages of a product being released to the general market. The unique product has been developed and patented, thus beginning a new industry (perhaps the reason why some industry analysis charts start here and do not include the embryonic stage which is more connected to “Product Lifecycles”). At the introduction stage, the firm may be alone in the industry. In this case, in 1973 Motorola was the first to introduce the concept of mobile telecommunications for the everyday consumer (even though it was still quite an elite group of people who could afford them). They began producing the first commercially successful mobile phone the Motorola DynaTAC.
At this point the life of the industry was still unproven and unknown. "Early adopters" and “innovators” needed to have the concepts relating to the product explained to