Chapter 2 Literature Review (2000 Words)
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The main aim of the literature review chapter is to address the research questions by analysing the existing body of text, and extract the most critical points of the present knowledge for evaluation and presentation (Saunders, Lewis and Thornhill, 2012). These critical points include the key findings, methodological and theoretical contributions to a specific subject (Saunders et al., 2012). In line with Saunders et al. (2012)’s description, this chapter reviews the literature that forms the basis for this study. In particular, this chapter presents an array of literature extracts from various researchers and authors that addresstechnological obsolescence and consumer management in firms. Particularly, this study was mainly oriented towards evaluating how Apple, a company that manufactures iPhones, manages its customers through strategies that involve technological obsolescence. The chapter, therefore, constitutes a review that seeks to create an in-depth understanding of technological obsolescence, forms of the technological obsolescence and the correlation between this type of obsolescence and consumer management. In addition, the most recent literature was evaluated and compared to the issue under study and discussed in this chapter (Saunders et al., 2012).
2.2. Technological Obsolescence
Several literatures provide distinct types of obsolescence (Grubler and Nemet, 2012). Basically, according to Grubler and Nemet (2012), the subject of obsolescence is a sub-category of property depreciation besides the normal deterioration. According to Grubler and Nemet (2012), while deterioration occurs through normal wear and tear, or environmental factors such as weather, obsolescence is a loss or decline of utility and not directly linked to time. Nonetheless, previous literatures have depicted several types of obsolescence associated with physical, external and functional systems of products. In this study, the concept of technological obsolescence is evaluated.
While several authors have argued the concept of obsolescence based on different views, an analysis of the arguments shows that obsolescence involves the loss of original items from the manufacturer, suppliers or the raw items that are substituted based on market trends and technological change (Sandborn, 2007; Grubler and Nemet, 2012). In one study on managing technological obsolescence, Sandborn (2007) asserts that obsolescence is technical, logistical or functional. Sandborn (2007) argues that the technological obsolescence is commonly, the most widespread form of obsolescence used today around the world. Sandborn (2007) seems to point out that one thing that firms should understand is that technological improvement is a very important factor for the sustainability of any business across any industry. One question that the author seems to answer concerns the reason for technological obsolescence in the products. Specifically, Sandborn (2007) insists that it is probably the most necessary, when one considers the need for ubiquitous technological improvement. It is obvious from Sandborn (2007)’s argument that technological obsolescence involves the near constant progression of technology and growth of technology in products and other commodities that depend of technology. For instance, when a company has launched a product, it is quite often that they are more than likely finalising the next product that is to take its place, something that remains common with mobile phone manufacturers. Grubler and Nemet (2012) argue that the most common practice with mobile phone companies is to have a new model or an updated model every year. This procedure coincides with the year or two year update of a mobile phone contract, allowing people to almost immediately get the newest phone on the market (Grubler and Nemet, 2012). Commonly, within the mobile phone market, most companies have a release month or a time of year that they like to release new items, with Apple for example that time of year is around June and July (Grubler and Nemet, 2012).
Generally, these arguments show that products that supersede older products are the ones which are fashionable on the technology market (Grubler and Nemet, 2012; Sandborn, 2007). In such cases, the mobile phones and tablets seem to have the fastest turnover in terms of updated technical models. On the other hand, the authors add that these technical models seem to advance, with the televisions having a fast, but longer duration of turnover that is quite relative to the cellphone/mobile market. Evidently, in general terms, consumers expect these televisions to have a longer shelf-life than that of the phones. So from this, it is clearly apparent the reasoning for when and how often a technological upgrade should occur. It would make no sense to upgrade a television every few months when consumers are more likely only going to change their television every 3 years, minimum.
2.3. Technological Obsolescence and Consumer Management
With this study’s finding determining the importance of setting up a clear framework that considers the customers when dealing with technical obsolescence, the researcher found out that few issues need further research. Therefore, the researcher formulated a few recommendations for future studies. First, the results obtained from the secondary study failed to demonstrate the process to be involved by marketers during analysis. In this case, future research could address the process of market analysis and forecasting when addressing technical strategies to improving business products. Additionally, continued research on technological obsolescence and the management of customers could give insight to several factors and strategies to consider in the current and dynamic business environment. Increasingly, further research into the issue under study is important in order to determine the most appropriate model to employ when addressing obsolescence and consumers.
According to Guiltinan (2009), most, if not all, consumers decide whether or when they will replace their consumer devices for any newer products. Indeed, consumers have the choice to decide whether they will replace their existing durables for newer versions. However, it is not well understood why consumers prefer replacing their existing products with newer products, despite their existing products being more valuable. While supporting this argument, other experts have likened technological obsolescence and related replacement decisions with fashion replacement decisions (Annamma et al., 2012). Annamma and his colleagues, in their analysis, found that technological advancement creates products that improve performance but characterized by unforced decisions. In such instances, it is clear that consumers with products that are easily upgradable and decision to replace are voluntary are more excited to replace their products. Echegaray (2015) supports the general view that consumers are driven by other factors rather than improvements and durability.
Undeniably, the research reviewconducted by Guiltinan (2009) and the study by Echegaray(2015) seem to show that durability and technological improvement is the least of any consumers’ concerns. Conversely, the existing economic theories generally postulate that higher quality products are associated with higher prices which signal to consumers that the products are of high quality. A study by in 2004 found that consumers of expensive products rarely consider the prices of the goods they purchase (Cooper, n.d). In particular, quality or durability of a product trailed other characteristics such as brand name and immediate performance of a product (Cooper, n.d). These findings are collaborated by Echegaray’s (2015) survey of the Brazilian middle class, which found that the Brazilian society is more interested in disposable goods or goods with short life span rather than those that can be reused. These studies indicate that consumer behavior and technological improvement are the most important drivers of technological obsolescence. Even when an upgrade is not superior over its predecessor in terms of durability or functionality, consumer will still replace their products.
The two factors have important implications to the current study. First, they suggest management of the issue must consider consumer behavior rather than focusing on technological obsolescence attributed to the product development at Apple Company. Secondly, it shows that any solution must focus on educating the masses on the issues of sustainability. Today, more than ever, as the current review suggests, obsolescence is not the sole result of improvement in technology, but the result of consumer driven initiated shortened lifespan, as a result of social pressure include the need to be recognized or social approval (Luchs, et al., 2011; Annamma et al., 2012; Glaubitz, 2011). It is quite obvious that customers are very important to any business unit, and that obsolescence is something that affects the customers to a greater extent. For instance, issues of social pressure where issues of trends and consumer needs seem to be of greater concern. One solution to the issue of controlling and managing the general market is by focusing on mass education while considering the overall behavior of the customers towards the products.
Concomitantly, other studies have given more thought into the use of technical growth of firms as a strategy that seeks to improve their competitive edge in the general market (Aladeojebi, 2013; Cohen, 2009; Gayton, 2008). In one study, in particular, Gayton (2008) argued that entrepreneurial behavior is one of the significant strategies of companies that are seeking to acquire and sustain a competitive advantage in global markets. To elaborate this business strategy further, other researchers have coined a plethora of terms to describe this issue at the firm level (Aladeojebi, 2013; Barngart and Pirce, 2011). For example, various terms such as internal corporate entrepreneurship, intrapreneuring, intracorporate entrepreneurship, intrapreneurship, corporate venturing and entrepreneurial strategy have been discussed (Aladeojebi, 2013; Barnhart and Pirce, 2011). Although many companies state that the entrepreneurial spirit is part of their organizational cultures, it is not very common to see organizations that have gained a competitive edge through the use of solid social strategies (Gayton, 2008; Barnhart and Pierce, 2011). This process is initiated by the top management and includes a redefinition of the business concept, reorganization, and the introduction of system-wide changes for innovation (Gayton, 2008; Barnhart and Pierce, 2011). For many firms, the most common reasons for adopting newer technologies are to provide a means to enhance survival and growth, thus staying competitive and enhancing innovation abilities (Gayton, 2008; Barnhart and Pierce, 2011). Meanwhile, such technology operations and upgrades can result in automated and repetitive works, could reduce the time needed to search for collect and format information (Baker, 2014). Baker (2014) contends that these new technologies can enable team members to focus on critical and inventive activities. Moreover, such innovations in certain spectrums have important implications in other areas such as marketing or distribution impacts on the concepts of product and service they intend to give to the customers (Gayton, 2008; Cohen, 2009; Barnhart and Pierce, 2011). With these authors’ views in mind, it has been predicted that the issue of obsolescence is going to occur more often in the future due to the rapid rate of growth of technology rich innovations. Despite the author seemingly arguing the concept of obsolescence in terms of the product (Slade, 2006), it is obvious that the problem of this obsolescence is more prevalent in Electronic, Electrical and Electromechanical Components (EEEC), perhaps, due to the shorter lifecycles of the components (Slade, 2006). However, for the case of long life systems, mechanical parts break down more frequently and in unexpected ways, mainly due to aging of the parts, hence, the need to phase out for new products (Slade, 2006). An analysis of these arguments shows that newer materials may be better in many aspects such as performance, maintenance, output and acceptability by the customers.
Furthermore, other material may also become obsolete due to changes in environmental regulations such as the directives concerning harzardous elements (Arthur, 2012). In the last two decades the software industry has grown at a very high rate and software upgrades have become a frequent practice (Arthur, 2012). Clearly, one of the main reasons for software upgrades is the innovation in hardware. For example, benefits from such improvements in computer hardware have greater operational speeds, larger capacities for internal storage, among other advantages (Arthur, 2012). However, such improvements could ultimately cause issues of incompatibility between the previous or older models and versions of the newer software. This description by Arthur (2012) explains the procedure that is involved leading to software or technical obsolescence. Software development firms, as a strategy, are no longer supporting older versions of software. For example, in 2014 Microsoft announced the end of support for Windows XP, which was launched in 2001. In complex systems the contribution 13 of software lifecycle cost is almost the same, or sometimes more than the hardware lifecycle cost in the total lifecycle cost of the system. These views show that firms need to look into issues of costs and compatibility of the new technologies besides understanding the customers in terms of their trends and behavior.
In conclusion, the literature review has established that there is a need for business firms to consider several factors, among them, the customers, when dealing with technological obsolescence. Publications and other literature material for the cited authors have produced concrete proof that technological obsolescence not only affects the firms profitability, but also the customers involved. In this case, the literature discussed in this section was able to describe the concept of technical obsolescence besides elaborating the drivers of this form of obsolescence. On the other hand, this chapter has elaborated the connection between technological obsolescence and customer management. Particularly, the evaluated literature shows that customer behavior and technological improvement go hand-in-hand. For instance, the literature described the rare consideration for prices for products in customers while many look at quality, durability, performance and other technological changes to their products. In such cases, the literature evaluated shows that companies need to understand the market by setting up strategies that involve market analysis. However, the literature failed to demonstrate how companies implement technological obsolescence while considering the customers, thus, the main purpose of this study. This setback, however, seems to describe the social factor that needs to be considered by manufacturing companies when dealing with issues of technological obsolescence. Generally, the literature presented in this chapter has shown the concept of technological obsolescence and consumer management by demonstrating how it is achieved, its effects and how firms manage their markets through technological changes. The next section discusses the research method employed in an effort to address the main aim of this study.
Chapter 3 Research Process (1000 Words)
The previous chapter presented a detailed discussion of the literature by evaluating the extant material presented by other authors. This chapter presents the research methods and the process designed and used to collect the data during this study (Saunders et al., 2009). In particular, this chapter depicts the techniques used in the identification, collection and analysis of the data that was used during this study. At the same time, this section discusses the approach adopted during the study and explains the research methods used to collect the data for the study. In addition, this chapter presents the methods used in the analysis of the data collected besides providing a comprehensive account of the process involved when selecting these methods (Reed, 2014; Saunders et al., 2009). Therefore, in line with Reed (2014)’s description, this chapter presents the research process used to collect the data that were relevant to achieving the research objectives of the study. Specifically, the methods were analyse the use of technological obsolescence in the management of customers in Apple iPhone manufacturer. These methods were used to analyse the concept of technical obsolescence in Apple, the main drivers of such a strategy and the use of technological obsolescence in addressing customer trends and wants within the company. For this study, a post-modern research philosophy was adopted (Saunders et al., 2009). This pradigm allowed the researcher to perform an in-depth interpretation of the study while using an interpretivism perspective during the study. Moreover, the philosophy allowed the researcher to collect the most current data and different perspectives from various studies addressing technological obsolescence and customer management practices at Apple iPhone manufacturer (Saunders et al., 2009).
3.2 Qualitative vs. Quantitative study
According to Saunders et al. (2009) and Reed (2014), qualitative studies are used when understanding the nature and different perspectives and not the quantity of a study. Qualitative studies seek to address or gain an in-depth understanding of the many and different perspectives on technology, the use of technological obsolescence and consumer management practices in firms (Saunders et al., 2009; Reed, 2014). In addition, the author, Reed, insists that the qualitative studies are subjective, thus, they are not clear cut. In other words, Reed (2014) suggests that qualitative studies are more likely to select and evaluate a small sample during research. Increasingly, qualitative studies enable flexibility and adaptability of the findings to the issue under study (Saunders et al., 2009). Such studies use open-ended questions, semi-structured interviews, focus groups, participant observation or using in-depth case studies (Saunders et al., 2009; Reed, 2014). Furthermore, qualitative studies allow the researcher to perform content analysis based on the grounded theory, analysis using research tools such as transcripts, quadrats, interview notes or any other documents.
Contrarily, quantitative studies are commonly designed to explain and evaluate the quantity of the information collected, which is then correlated into mathematical context for statistical significance (Saunders et al., 2009). In such instances, Saunders et al. (2009) point out that quantitative studies seek to answer research questions with precision besides determining the relationship between the different variables under a specific research study. According to their argument, the most common methods used in quantitative studies include surveys, transcripts, quadratics, and questionnaires, which allow researchers to calculate percentages, means, standard deviations and other statistical methods. Therefore, such studies enable researchers to analyse the collected data by using descriptive statistics (Saunders et al., 2009). Whereas quantitative studies help researchers to depict the relationships that exist between the variables of a particular study, Reed (2014) cautions about its use in research operations. Reed (2014) argues that when using quantitative studies, it is quite difficult to determine the various perceptions, feelings and views depicted from very large samples (Reed, 2014). Despite this shortcoming, the author explains that researchers could adopt a mixed methodology to address the limitations of the research strategy employed during research.
However, on the basis of this study and the different explanations about research approaches, the researcher opted to use the qualitative studies over the quantitative research approach to collect and analyse the data.
3.3 Research Design_Case Study
The focus of this study was on iPhone, a mobile device developed by Apple Corporation. Specifically, since its inception in 2007, Apple has released about ten generations of iPhone. The first iPhone was launched on the 29th of June 2007. Apple has released consecutive models each year since its inception, indicating a high degree of improvement. Yearly release of iPhone models makes it a suitable case study for analyzing technological obsolescence, as release of each model is associated with replacement behaviors among its employees (Apple Corporation, 2017). Moreover, more than one billion iPhones have been sold to date, with most purchases being made by repeat customers, or customers upgrading their devices. Therefore, iPhone was identified as a good case study on how improvement in design can promote obsolescence, as well as, a good case when examining trends in consumerism and the management of consumers.
3.4 Research methods used-most preferred is secondary methods
For this study, the researcher used secondary research methods to collect and analyse data (Saunders et al., 2009; Reed, 2014). In particular, the researcher used secondary methods, which ensured the researcher made use of information that was previously researched on for other purposes and was available for public use (Saunders et al., 2009). On the other hand, previous studies on Apple enabled the researcher to obtain information that addressed the research problem. Based on this technique, a single case, Apple Company, was selected, studied and analysed for the study (Saunders et al., 2009). More importantly, the case study allowed the researcher to address technological obsolescence and how the company has used the strategy in managing its customers. Furthermore, secondary sources allowed the researcher to address the research questions based on different perspectives and the various components of the research purpose (Reed, 2014; Saunders et al., 2009). The secondary findings were then analysed and discussed based on a narrative process.
The following secondary sources were selected during this study in order to provide the most appropriate information concerning technological obsolescence and consumer management in Apple, and particularly, the iPhones.
Hua and Wemmer (2006)-Journal
Kasrda et al. (2007)-Journal
Jennings (2015)-Research study
These secondary sources were then presented based on the Harvard methods in the reference section in order to provide a detailed description of the sources.
In summary, this section has presented a detailed explanation of the research process involved during this study. This chapter describes the reason behind adopting the post-modern research paradigm (Saunders et al., 2009), which allowed the use of the interpretative perspective in the collection and analysis of the findings (Saunders et al., 2009; Reed, 2014). Based on this design, this chapter describes the process involved in the selection of the qualitative approach over the quantitative research method for the study. This chapter has demonstrated the overriding reason behind selecting and addressing the issue under study in the iPhone model that is manufactured by Apple inc. Secondary methods were adopted during this study in order to address the main purpose of the study. In this case, the secondary sources were then listed and the information extracted based on the main purpose of the study. The next section presents the results obtained during this study and discusses the findings based on the research questions.