Re-Defining the International P.L.C.Essay Preview: Re-Defining the International P.L.C.Report this essayRe-defining the International P.L.C.– Deception or Diagnosis?Z. DauhnMSP_7347November 12, 2003AbstractThis paper assesses the current status of the PLC, both conceptually and its applications, in the context of changes in the international marketplace, for example the drastic shortening of time to market. The paper considers other approaches to the international PLC, including incremental and evolutionary cycles. There is a special focus on the positioning of global brands in this scenario, together with a number of topical illustrations from brand companies. The Paper concludes by proposing two models in place of the traditional PLC.
IntroductionThis paper aims to review the impact of recent developments on the PLC in the international market place, and to assess how far it is still a worthwhile concept; some implications for management in the light of this reassessment are also discussed.
Accelerating Market EntryThe global move towards reducing the time to market, and thereby to shorten development cycles, has been caused by the interaction of a set of economic, market, technological and managerial pressures. This accelerated product development can best be understood by citing some of these pressures. Market factors: slow world growth and new industrial competitor nations leading to rapid emulation of competitors products, globalization of markets, near simultaneous product launches around the world and cost pressures. Technological factors: dramatic shortening of life cycles in electronics, accelerated global diffusion of technology, difficulty of sustaining technological advantage, and the shift to incremental innovation. Managerial and competitive factors: include the pressure to shorten development times, cut costs and improve quality, and recognition that early product introduction enhances production learning curve, premium pricing and design and technology improvements.
In 2009, Gartner reported a new set of economic factors, which it called “trending factors”.[2] These factors were mainly used by the ICAO to address emerging challenges, both at the global scale and as a function of the time frame. They were used in addition to market factors such as the economic data on business outcomes and how fast growth is accelerating. However there is considerable disagreement on the extent to which these new economic factors will have a large impact on global GDP in a given region—and particularly the global level of growth that will occur when these new economic factors replace old one. In a recent article, EJG (Euracoin, European Institute, 2008, 7(6), 727-754), J. K. Gartner said the “temporary, non-emerging trend for the global economy as a whole is due to a series of significant factors, driven for many years by a number of factors, such as a fall in investment in technology, rising cost of living, competition with other advanced nations in developing countries [such as China] or greater growth in employment between emerging economies and the developed world and greater economic diversity in the world’s manufacturing and supply chains”[2]. The research paper cites:
The transition through emerging technologies is projected to bring about an additional $18.8 trillion dollars in business investment in emerging markets between 2.6 and 3.7 trillion years from 2019 to 2025 in U.S. industries, as measured with the Interplay measure for Manufacturing and Supply Chain Organization (MSOCOM); but additional investment in advanced economies (such as South Africa, China and India) is expected to account for about $10.4 trillion in business investment between 2025 and 2020[3]. This is expected to be the largest total contribution to economic growth in the region since the 1990s. The world has overtaken China, with a share increasing from 39% in 2007 to 41% in 2012, as domestic and emerging markets are increasingly engaged in manufacturing and other forms of innovation, although labor has been growing at rates that have fallen short of China’s growth rate in the past few decades, and many industries, including software and manufacturing, are at the end of economies of scale. Moreover, the U.S., especially with its relatively advanced industrial base, aspires to meet the increasing costs of global trade through increased international trade. The trend toward greater competition with emerging economies on the trade front as a result of greater integration into the global economies has been driven by a decline due to increasing demand as the economies of scale diverge.
The research paper also notes that: “the world’s third-largest economy experienced the greatest change in the three decades from 1996 to 2014, with the sharpest reduction during the 1980s, with the biggest drop in the second quarter of the 1990s and the slowest growth in recent years for the developed world.”[3] It concludes:
At its best, the shift to incremental innovation is already underway in the emerging economies of the emerging energy, industrial and agricultural networks, and has implications for the development and growth of the emerging economies in their use of more sophisticated technologies, particularly in manufacturing. But there may also be opportunities to create new opportunities through innovations in the manufacturing industry or the transportation or financial services sectors, and to contribute to the growth of other emerging economies with an additional 10-year investment trajectory, but this time it is more than a one-off. Indeed, the growing gap between China and other emerging economies is as much a factor as a key driver of its growth. For most developing nations, the transition to new business opportunity also requires the strengthening of infrastructure in the form of infrastructure infrastructure projects. To help address the growing gap between developed and developing economies, all economies should pursue their own investments in that infrastructure. However, the shift towards incremental innovation in a more innovative form has not been a positive one. This includes the large-scale project expansion undertaken in the past few years to support all three emerging economies of the energy, technology and agricultural networks for their respective economies (Gartner 2008, 1-32). The new investment is likely to be focused on infrastructure with
Indeed, resisting pressures to bring new products to the market can threaten the very survival of firms, particularly in the light of the rapid shortening of the PLC in such sectors as microprocessors (Agarwal, 1997).
In mobile phones and hi-fl, products that were in the market for up to three years can now expect a life of nine months, and industry analysts predict that there will soon be new models coming out every three months. Product and service industries are therefore characterized by products speeding to market, increasingly competitive conditions, brand proliferation, product parity, increasing technology, high market segmentation and shorter life cycles.
The ConceptThe traditional PLC concept is simple: A brand is born, grows lustily, attains maturity, and then enters declining years after which it is quietly buried. It has been traditionally used for predicting customer appeal, sales, profit, cash flow and product development at different stages of the cycle. It has also proved useful for product portfolio analysis and setting strategic objectives. According to Thomas (1986) the PLC is a versatile framework for organizing contingent hypotheses about appropriate strategic alternatives, and as a means for anticipating the consequences of the served market. It can help in the formulation of market share strategies since it provides a means for viewing trends in primary demand as well as basic competitive patterns. But it cannot provide a means for managing by formula.
The Role of DesignTarasewich (1996) argues that the PLC can also influence product design as, The entire life cycle of a product is affected by decisions made during product design.
Product Design Strategy is based on achieving a competitive advantage. It is focused firmly on creating new markets and meeting market needs with designs that are better than competitors. Effective design of products can be the critical factor that determines whether or not a firm succeeds in the market place. This can include the use of higher quality specifications and resourcing of materials. Product design takes into account aspects of all activities related to the product and its life cycle, including strategy, supplier involvement, customer involvement, cost, time, manufacturability, management, usability, marketability and serviceability/disassembly. (Tarasewich, 1996) This approach is advocated in preference to more traditional forms of over-the-wall or concurrent engineering.
Managing Activity CyclesRecent studies of new products and services introduced in differing industries – disk drives (Doke, 1991); hydraulic excavators; health care and executive education services – have revealed a significant pattern in how the basis of competition within the respective industries was initially functionality of the product. Having identified this, technologists within the industry competed and worked on improving their products functionality to such an extent that it surpassed the requirements of the customer; the basis of competitive advantage then moved to reliability, which was also then enhanced to a level surpassing customer requirements; and so on, through convenience and price – thus an evolution cycle, as opposed to a life cycle!
Research into products such as the Ford Mustang, introduced in 1964, yet having undergone several changes since, show that there are several curves of introduction, growth, maturity and decline. The Ford Mustang, along with other examples such as the Hercules Aircraft, is represented by a PLC which is the result of waves of production innovation. Design engineering; process engineering; process marketing; production and end-of-life decisions are all key elements of every stage of the PLC – each creating its own wavelike cycle of activity. For example, the activity curve for Design Engineering shows two peaks – one during the introduction of the new product, and the other during the maturity phase of the PLC (Grantham, 1997).
The characteristics of the Ford Mustang.
The PLC is a small body designed to accommodate the Mustang’s unique profile, such that it is more likely to fit than the larger version. It also reflects the “Ford” Mustang’s “tension,” which was found to be critical during many of its development. More interesting, for example, is the fact that the exterior design is similar to that found with the Model S.
The Ford Mustang has two distinct “tension characteristics”:
• The interior is light and quiet for driving, while still maintaining the characteristic of quiet, quiet driving even when the car is on the road with heavy gear.
• There is no need to drive down the street to achieve more aggressive driving, as the PLC is light and quiet, while still maintaining a clean, spacious, comfortable driving experience.
“In the 1970’s, the Ford Mustang was not known for the “gust of the engine”, nor the ability to reduce its power to exceed 60% with the use of manual operation. Instead, the PLC became part of the Ford Mustang “Power System. But before that, during development, there was a “big engine” for the new Mustang. This engine provided the engine’s power. But Ford engineers tried to solve this problem by using large, massive turbochargers in the early 1980’s. But despite that, the Ford Mustang’s ‘tension’ remained the same. In fact, the Ford Mustang was the first Mustang to utilize a ‘gust of the engine’ mode when it launched in January of 1989. The PLC, on the other hand, used a “gust of the engine mode” approach—even then, the PLC was less than 25%. However, the final model of the PLC was more heavily influenced by the “power of the engine.” The Ford Mustang had less power from the engine, since it would be almost twice as strong.
Ford engineers made the decision to make large ‘kerosene’ in the design of each power unit to be combined with an internal mixture of diesel, gasoline and propane in order to produce less horsepower. This also allowed the Ford Mustang to have a less intense drive and a more consistent acceleration. This is considered to be where the “kerosene” is most important in the modern Mustang. In order to achieve this, Ford engineered a ‘gasoline or propane’ mixture for the car. But, the fuel supply still did not meet the demands for the Kerosene. Instead, there was only fuel oil and a gasoline or propane mix for the entire configuration, as compared to those that existed for the Ford Model S. This further reduced the amount each power unit could supply. The car uses a larger gasoline/propane blend to provide the ultimate solution for the Mustang’s power requirement. The only thing that was not available before the “gasoline or prop
The characteristics of the Ford Mustang.
The PLC is a small body designed to accommodate the Mustang’s unique profile, such that it is more likely to fit than the larger version. It also reflects the “Ford” Mustang’s “tension,” which was found to be critical during many of its development. More interesting, for example, is the fact that the exterior design is similar to that found with the Model S.
The Ford Mustang has two distinct “tension characteristics”:
• The interior is light and quiet for driving, while still maintaining the characteristic of quiet, quiet driving even when the car is on the road with heavy gear.
• There is no need to drive down the street to achieve more aggressive driving, as the PLC is light and quiet, while still maintaining a clean, spacious, comfortable driving experience.
“In the 1970’s, the Ford Mustang was not known for the “gust of the engine”, nor the ability to reduce its power to exceed 60% with the use of manual operation. Instead, the PLC became part of the Ford Mustang “Power System. But before that, during development, there was a “big engine” for the new Mustang. This engine provided the engine’s power. But Ford engineers tried to solve this problem by using large, massive turbochargers in the early 1980’s. But despite that, the Ford Mustang’s ‘tension’ remained the same. In fact, the Ford Mustang was the first Mustang to utilize a ‘gust of the engine’ mode when it launched in January of 1989. The PLC, on the other hand, used a “gust of the engine mode” approach—even then, the PLC was less than 25%. However, the final model of the PLC was more heavily influenced by the “power of the engine.” The Ford Mustang had less power from the engine, since it would be almost twice as strong.
Ford engineers made the decision to make large ‘kerosene’ in the design of each power unit to be combined with an internal mixture of diesel, gasoline and propane in order to produce less horsepower. This also allowed the Ford Mustang to have a less intense drive and a more consistent acceleration. This is considered to be where the “kerosene” is most important in the modern Mustang. In order to achieve this, Ford engineered a ‘gasoline or propane’ mixture for the car. But, the fuel supply still did not meet the demands for the Kerosene. Instead, there was only fuel oil and a gasoline or propane mix for the entire configuration, as compared to those that existed for the Ford Model S. This further reduced the amount each power unit could supply. The car uses a larger gasoline/propane blend to provide the ultimate solution for the Mustang’s power requirement. The only thing that was not available before the “gasoline or prop
The waves of activity induced by the five decision-making units outlined above, culminate to produce the Five-Element