Another industry that lends itself to studying mature products is the electronics industry due to its fast-paced product life-cycles. Even among prominent companies in this sector, market leadership never goes unchallenged. One of the reasons why this is the case is the nature of electronic products, whose utility, compatibility and adaptability decline rapidly from the moment they are introduced in the market. Hence, the rapid technological advancement that is the life-blood of this industry also hampers the prospects of mature products. But this alone does not determine how a company will be able to satisfy its stakeholders – the methods adopted by the management also play a role. In particular, how managers handle different stages of the product life-cycle, in terms of marketing strategy, value add-ons, etc factor into the company’s profitability. For example,
“Managers are faced with different strategic goals in the course of the market cycle. In the first stage, when technology opens up a new product market, rapid growth must take precedence over profit if companies are to gain a leading market share. In the second stage, when the new product penetrates the market, the goal shifts from growth at any cost to a balance between growth and profit. The final stage entails maximizing profit in a mature market. Managers have to operate in different ways to attain each goal. Moreover, because they may need to switch goals suddenly, they must be able to adjust their operations swiftly.” (Nevens, Guiniven, & Paulsen, 1998)
Another instance of how a mature product market poses bottlenecks for profits is the commercial card business. Bankers who entered this market in the last decade have not found revenues as quickly as they had hoped. Though some segments of this market remain untapped, leading strategists to envision optimistic growth projections, those banking institutions that have ventured into this business have encountered “growing pains, technology snafus, even organizational confusion.” (Bloom, 2007) Lack of quality manpower to dispense and implement card systems is another handicap. Clients have also proven un-cooperative, as many of them don’t make full use of these systems. Bankers are coming to the understanding that the success they found with consumer cards, including credit cards, debit cards, etc cannot be equivalently replicated in the area of commercial cards. Consumer cards as a product reached maturity a long time back and its dynamics are well understood by all sides in a transaction. The president of American Express, Edward P. Gilligan notes the difficulties in extending the success of a proven mature product to another domain:
“It’s a different world. It’s the difference between selling products, which you do on the consumer side, and selling solutions to companies. Companies are eager for the products, and most bankers say they got into the business in response to inquiries from corporate customers. But the road from paper-based to electronic purchasing and expense reporting can be bumpy. Many companies are unprepared for the changes in practices and procedures that such a move entails; many banks are caught off-guard by the support their clients need.” (Bloom, 2007)