Fiero vs Miata Product Life Cycle

The product life cycle is can be a valuable tool for strategist and if managed it can provide more sales and higher profits. The product life cycle of the Pontiac Fiero (1984-1989) compared to Mazda Miata (1989-2006) illustrates the value of managing the product life cycle as a strategic tool.

The stages of product life cycle are Market development (pre-launch), Market growth, Market Maturity, and finally market decline. The key for the strategist-scientist is to predict the length of each stage (Levitt, 1965).

The unit sales of the Fiero and Miata illustrate the growth, maturity, and decline of the cycle (See Figure 1). The Fiero was much more meteoric and catastrophic while the Miata held in maturity phase for a 3x over the Fiero. The Miata matched the sales of the Fiero in seven years sold and doubled the over sales of the Fiero.

The Miata versus Fiero figures show the typical short-term vision of American carmakers in the 1980s. It was well know inside Pontiac that the Fiero had safety fire issues before release (Ingrassia & White, 1994). Pontiac executives should have been able to predict a short product life cycle for a fire-prone vehicle because of the high profile safety related demise of the Chevrolet Corvair in the 1960s.

What seemed to be missing from the Pontiac executives and strategist was a since of the environment. They misinterpreted the value Americans placed on quality and they decided to fight the National Highway Traffic Safety Administration efforts for a recall (Ingrassia & White, 1994).

Finally, Pontiac executives knew the activities they needed to do to make money (new and exciting models) but they lack a focus on sustainability (Porter, 1996). If they had considered the long-term management of the life cycle, they might have fixed the fire problems in the Fiero and results would have been better. One Pontiac executive was quoted as saying, "The Fiero could have been a Miata" (Ingrassia & White, 1994).

Figure 1.

References

Ingrassia P. & White, J. (1994) Fiero Firing Squad. Autoweek September 26, 1994. Retrieved November 2, 2007, from

Levitt, T. (1965) EXPLOIT the Product Life Cycle. Harvard Business Review; Nov/Dec65, Vol. 43 Issue 6, p81-94, 14p

Porter, E. (1996, Nov. - Dec.). What is Strategy? Harvard Buiness Review , 61-78.