RISKS FACED AT EACH STAGE OF PRODUCT DEVELOPMENT LIFE CYCLE AND HOW THEY ARE MANAGED
The product development life cycle has four stages and these include introduction, growth, maturity and the decline stage. Stage One; Introd!t"on
This is the most expensive stage of a company launching a new product and the risk is attempting to sell sell a product in a new market market where there is a small market and low demand as a result of customers not taking on the new product which means low sales . Through carrying out research and development activities such as research on consumer tests and preferences which helps to manage the risks faced. Stage T#o; Gro#t$
This stage is characterized by a strong growth in sales of profits and because the company can start to benefit from economies of scale in production, profit margins as well as the overall amount of profits will increase. The risks include attempting to invest more money in the new product such as packaging and branding of the product which may not be profitable in the market and this can be managed by carrying out promotional activities such as advertising to create awareness to the consumers. Stage T$ree; Matr"t%
The product is establish and the aim for the manufacturer is now to maintain the market share and grow sales of their products to achieve as large large share in the market as possible and the risks include Atta"n"ng &a'e& (o')e *ea+ . After the steady increase in sales during the growth stage, the
market starts to become saturated as there are few new customers and majority of the customers who are ever going to purchase the product have already done so. De!rea&"ng )ar+et &$are . This is due the increasing number of manufacturers who are all
competing for a share of the market accompanied with the highest competition which makes it difficult for companies to maintain their market share.
1|Page
Pro,"t& &tart to de!rea&e due to the falling prices, high competition on the market by a large
volume of manufacturers of similar products. Through the organization taking on new innovative ways such as improving the branding and packaging of the products to make their products more appealing into customers that will maintain and perhalfs increase their market share Stage ,or; De!'"ne
This is the last stage of product life cycle development is very clearly demonstrated by the fall in sales and profits, thus risks are falling sales and profits as a result of declining market share , sales will start to fall and the overall profit that could be available to the manufacturer in the market will start to decrease. Mar+et &$are de!'"ne . During the final phase the product life cycle, the market for the product
will start to decline, consumers will typically stop buying the product in favor of something newer and better. The market will shrink which could be due to it becoming saturated and consumers switching to less expensive products. There is a risk of withdrawing the product from the market. ltimately
for a lot of
manufacturers could get to a point where they no longer make a profit from their product as there may be no way to revise the decline and the only option is to withdraw their product before it starts to lose them money. These are managed through extending the life cycle of their product and continuing making profits by looking at alternative means of production and newer cheaper markets HAVE YOU EVER FACED ARISK AT INDIVIDUAL OR -USINESS LEVEL; WAS IT AN OPPORTUITY OR A THREAT TO YOU. HOW DID YOU HANDLE IT.
!es, " faced a business risk whereby " used part of my tuition to invest in a yellow banana business. At the start " was so scared that " may not prosper the business because " had to incur more costs of hiring some body to sell for me .#ut later on it turned out to be profitable thus an opportunity
2|Page
because it had started growing than " expected and yielding profits in that my capital doubled .This even helped me to stop depending on my parents for up keep and other essentials. " also had to up a bank account to start saving for the future since in a week " would get a double profit and at the end of the semester " was able to sponsor myself a trip to $airobi. This helped me see benefits of owning a business ASSESSTHE IMPACT OF RISKS ON THE VARIOUS STAKE HOLDERS OF A -USINESS YOU ARE FAMILIAR WITH. MTN TELECOMMUNICATION COMPANY .
%T$
aims
at creating
and
managing stakeholder value
,essential
to
the group&s
sustability.'takeholders refers to all people with whom mtn engage ,employ ,do business, rely on for licenses, funding and finance and impact in so many different ways. Frad or !orr*t"on . This is the risk of financial loss due fraudulent acts by staff members or
subscribers or collusion by top management and staff. This leads to conflicts amongst the employees of the firm thus inefficient productivity. E/*o&re to negat"(e ,"nan!"a' )ar+et ,'!tat"on& . (iven the broad geographic footprint.
%T$ is exposed to currencies other than their reporting currencies. The impact on reported financial results and the servicing of foreign denominated obligation which leads to financial risks such as credit and li)uidity and as a result the firm fails to meet its liabilities as and when they fall due thus failure to provide dividends to their shareholders. Meet"ng t$e e/*e!tat"on& o, !&to)er& .%T$ recognizes the key success is a strong focus on
customer experience .This includes maintaining a positive brand perception, the availability of a broad range of products and services and high )uality and consistent customer experience at all touch points .Therefore failure to satisfy customer expectations may lead to customers shifting to another network implying reduced market share an d position thus losses. E,,e!t"(e go(ernan!e and !ontro' are !r"t"!a' to )a"nta"n *ro,"ta0"'"t% and 0&"ne&& !ont"n"t% . The implementation of the mature and well controlled process is key to providing
confidence and comfort to stake holders across the value chain when dealing with %T$.
3|Page
I)*a!t o, ad(er&e reg'ator% !$ange& or non1!o)*'"an!e #"t$ t$e 'a#& and reg'at"on& .
*hanging laws and regulations have led to increased regulatory or legal re)uirements .This may impact the commercial businesses, so too could adverse decisions by regulators on issues such as spectrum allocation, tariff amendements."n many markets, tariffs are not properly regulated which has resulted into price wars and new licenses being launched into already saturated market which may led information asymmetry among employees. Potent"a' t$reat& to !ont"n"t% o, o*erat"on& a& a re&'t o, *o'"t"!a' en("ron)enta' and )a!roe!ono)"! e(ent&2 %any of their markets are characterized by economies that are in
various stages of development, as a result there is political instability which scares away the potential investors. Co)*ro)"&ed "n,or)at"on &e!r"t% and !&to)er *r"(a!% . %T$ believes that information is
critical to achieving their strategic business goal from internal and external threats, misuse and fraud, failure and unavailability of information may lead loss of customers due the interference with the customer services. H)an re&or!e r"&+ . The rapid expansion of the group is putting pressure on the available
human resource capacity as well as on the depth of management in some operations. "nability to attract, develop and retain the right staff could adversely affect the group performance and lead loss of competent employees in the firm. Re'at"on&$"* and *artner&$"* r"&+ .%T$ business partners and shareholders in subsidiaries
fulfill an important role in establishing good relations with local regulatory bodies and customers which are a key strength. A breakdown in this relationships or loss of financial strength by current partners may cause reputational damage thereby chasing away both customers and shareholders.
4|Page
