Growing consumer demand for smart phones has now become very profound. The growing middle class in Latin America and Asian has presented new and unique opportunities for growth. Smart phone in particular are now becoming high attractive products for consumers primarily due to their compelling value proposition. Individuals can check email; download apps, play games, view movies and much more on a smart phone. To take advantage of this demand, Google has made its products very ubiquitous throughout the world, and thus increasing its distribution. Android currently commands approximately 66% of the smartphone market. By making its software free to use for consumers while also making it fairly easy for developers to create applications on its platform, Google has steadily gained market share. Furthermore, the software itself is very scalable. Through these means Google can achieve economies of scale that ultimately lower the cost per unit for the company. This is very helpful as lowering the cost per software unit makes margins higher and increases profit over time for the company (McCarthy, 2011).
Another strategy that can be used to leverage growing consumer demand is to create an entire ecosystem of products and applications that work well together. Microsoft is utilizing this strategy to take advantage of emerging market demand for not only smartphones, but also entertainment products in general. Through brand extension, the company intends to capture a large portion of the consumer's wallet by bundling products and services together. Through bundling and product extension, Microsoft can create a compelling value proposition for consumers who would like...
For instance, Microsoft offers the cornerstone product to any tablet or personal computer, which is the windows operating system. Currently, Microsoft has roughly 88% of the operating system software market. However, the company is leveraging this product to create more value through product extension. The company has recently unveiled its XBOX One home entertainment platform. This product integrates home services and gaming in a seamless and intuitive fashion. The company has also unveiled a line of tablets and smartphones to complement the overall entertainment and user experience. All these products combined create a unique experience for the consumer, which ultimately drives profit growth for the business. For instance, consumers can use windows phones to access information and documents created by the windows tablet. When they are done using the windows tablet, they can view a movie using their XBOX One. After the movie, the individual could then work on a windows document from their Microsoft laptop. All the services are integrated in a seamless manner that allows for easy transition for the consumer. In addition, through budding, these products will ultimately be cheaper than if they were purchased individually (Wee, 2005).
