Financial strategies to mitigate planned obsolescence risk and its impact on technology product sustainability
Keywords:
Planned obsolescence, financial strategy, sustainability, consumer loyalty, technology industryAbstract
Planned obsolescence, a prevalent strategy in the technology industry, accelerates product replacement cycles, impacting both consumer trust and environmental sustainability. With stricter regulations and increased consumer awareness, companies face the challenge of balancing profit with sustainable practices. This study aims to explore financial strategies that mitigate risks associated with planned obsolescence, ensuring companies maintain long-term profitability while addressing consumer and environmental concerns. This qualitative case study relies on a literature review as the primary data source, analyzing prior studies and regulatory frameworks on planned obsolescence. The study adopts a structured approach to identify financial strategies relevant to mitigating obsolescence risks and preserving brand loyalty. Findings suggest several effective financial strategies, including risk reserves for legal contingencies, investments in sustainable R&D, and the adoption of subscription or leasing models. These strategies help companies manage planned obsolescence more responsibly, enhancing consumer trust and supporting regulatory compliance. Transparency and consumer incentives further support brand loyalty despite periodic product updates. Mitigating planned obsolescence requires a strategic financial approach that balances profitability with responsibility. By adopting risk management practices, sustainable innovation, and alternative business models, companies can align planned obsolescence with environmental sustainability and consumer expectations. These findings underscore the importance of incorporating circular economy principles in financial strategy. Governments are encouraged to enhance regulations and offer incentives to companies demonstrating sustainable practices, fostering a technology sector that aligns economic success with environmental and consumer well-being
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