Business question help

4a). Each of the following might be considered examples of how the product life cycle of products has been extended, through international trade, except?
(1 mark)

A. wind-up radios
B. electronic calculators
C. Microsoft X-box games consoles
D. solar energy panels


4b). Explain your answer above (3 marks)

I'm really not sure what the answer is and I feel all of them could have been extended.

I teach this stuff and find this particular question rather ill-considered. An argument could be made for each of them, as you don't have enough contextual information to make a reasoned argument.

For A, you could argue that it's irrelevant due to the proliferation of alternative technologies and energy storage in batteries, which are widely available in the majority of countries. On the other hand, a lot of remote regions of the world could benefit greatly from a wind-up radio as a means of accessing information relatively cheaply (no need for electricity supply, whether battery or cord).

For B, the usefulness of calculators is pretty obvious. In some areas they have been replaced by other technologies, such as mobile phones, but they still provide a higher degree of performance (more advanced calculations) at a much lower energy cost. This is valuable in both developed and less developed countries. Furthermore, in countries where numeracy is low, the relative ease of doing basic calculations on a calculator as opposed to knowing the mechanics behind the maths is valuable. Indeed, a highly important development in the western world was the move from the Roman (XVI) to the Arabic (16) numerical system, as this allowed people to do basic calculations much easier and much quicker.

For C, you could argue that consoles such as the Xbox are launched in markets that can afford them essentially at the same time, and their replacements/competitors are launched around the same time as well. Microsoft don't push the original xbox in LDCs as they launch the 360 in developed countries, they simply stop producing and selling the earlier version once base demand drops below a certain point in established markets. However, if you take a wider view of the PLC (which you should), and follow disused technology from the west, you'll find that a fair share of it makes it way to less developed countries in, for example, africa. I recently heard an interesting radio show - I think it was an episode of the NPR show Planet Money, but couldn't say for sure - where they went to a refugee camp in an African country. One of the chaps they talked to had bought an old electricity generator and a couple of old xboxs (which he learned to repair etc when they broke), and would let other people play on them for a certain hourly fee. So the PLC is extended and generates both financial income and hedonic enjoyment.

This, however, is not a part of the classic view of the PLC, so the answer sought is probably C. But I think there's a good case to be made for applying an extended view of the PLC. If you choose to use any of my arguments, do make it clear to your marker that you understand the basic reasoning, but argue in favour of an extended view as the product is still generating income - only not for the original developer.

Alternatively, you could argue that there's scope for extending the PLC by launching into developed by poorer nations further down the line. As R&D costs are recouped and Microsoft start to reap the benefits of economies of scale in their production along with the decreasing cost of constituent components (e.g. hard drive, graphics card) as these become increasingly obsolete and sold cheaper, they can lower the price of the base unit and introduce it to new segments in a new market. For instance, Estonia's gdp per capita is aroudn $18.500, as such the average person there won't be able to buy an xbox at the same cost as could a Swede (gdp per capita $58.200). However, through selling more units at a lower margin once the cost comes down, MS could make use of the "long tail" principle (http://en.wikipedia.org/wiki/Long_tail). This would also allow them to sell more games etc in the long run, and would create a market for superfluous units of games/consoles/accessories.

For D, the market for solar energy panels is relatively small (compared to other forms of energy generation). As such, the more countries you can push your product in, the higher your chances of recouping costs. Moreover, there is a tendency for Northern countries - with less sunshine, and as such less viability for this technology - to be richer than Southern countries. However, southern countries are developing, and as they do so their thirst for energy will grow, increasing the market for solar panels. Moreover, developed countries may be willing to subsidise part of the cost of installing solar panels in sunny developing countries due to their green credentials..


In short, C is probably your answer, but I don't like it.