Discuss the effect of shorter product life cycles on a company’s planning process.

Global competition is placing new emphasis on some basic tenets of business. It is reducing time frames and focusing on the importance of quality, competitive prices, and innovative products. Time is becoming a precious commodity for business, and expanding technology is shortening product life cycles and creating greater opportunities for innovative products. A company no longer can introduce a new product with the expectation of dominating the market for years while the idea spreads slowly through world markets. In any given year, for example, two thirds of Hewlett-Packard’s revenue comes from product introduced in the prior three years. Shorter product life cycles mean that a company must maximize sales rapidly to recover development costs and generate a profit by offering its products globally. Along with technological advances have come enhanced market expectation for innovative products at competitive prices. Today, strategic planning must include emphasis on quality, technology, and cost containment. To achieve the flexibility and speed required under such conditions, many firms are entering collaborative relationships to shore up their weaknesses whether in distribution, technology or manufacturing that will enable them to respond to the problems created by shorter life cycles.

5. What is the importance of collaborative relationships to competition?

The competitive environment of international business is changing rapidly. To be competitive in global markets a company must meet or exceed new standards for quality and new levels of technology. There is an increasing change of pace for product development and profitability. Cost efficient, technologically advanced products are being offered by competitors and demanded in established markets as well as in markets rising from formerly Marxist-socialist economies. Opportunities abound the world over, but to benefit, firms must be current in new technology, have the ability to keep abreast of technological change, have distribution systems to capitalize on global demand, have cost-effective manufacturing, and have capital to build new systems as necessary.

The accelerating rate of technological progress, market demand created by global industrialization, and the creation of new middle classes will result in tremendous potential in global markets. But, along with this surge in global demand comes an increase in competition as technology and management capabilities spread beyond global companies to new competitors from Asia, Europe, and Latin America. Although global markets offer tremendous potential, companies seeking to function effectively in a fragmented global market of five billion people are being forced to stretch production, design\engineering, and marketing resources and capabilities because of the intensity of competition and the increasing pace of technology. Improvements in quality and staying on the cutting edge of technology are critical and basic for survival but ofte