Page 3: Technological innovation
Scientific research and the development of new products are extremely costly and are often beyond the financial resources of small companies. For Amway this investment has been key to its success.
Amway has been a market leader in researching and developing new products throughout its product portfolioand designing new manufacturing processes, essential if it is to keep ahead of its competitors.
All products move through phases during their life span, much like a person. New products are first conceived and developed for the market. Then their sales hopefully will grow, as consumers become aware of them, before levelling off as the product reaches maturity. This is when sales and profits are likely to be at a maximum.
Finally, the product sales may begin to decline as it loses popularity or is superseded by a new, more technologically advanced item and it may be withdrawn from the market (this is called the product life cycle).
Companies may try to prevent this decline by extending the life span through extension strategies, breathing new life into an old product. Research and development are associated both with the development stage of the product life cycle and any extension strategies. In the highly competitive market of hair care products, it is vital to keep developing and improving the products offered.