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STRATEGIC

MANAGEMENT

LIFE CYCLE

ANALYSIS-Y. -S GOLDIE AGARWAL 02. -S SAUMYA PADHYE 27. -S CHETNA PATIL 36. -S DEVYANI RANPISE 42.S GAYATRI

-URYAWANSHI 43. -S PRIYANKA SONAWANE

52

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INDUSTRY LIFE

CYCLE Every Industry typically passesthrough different stages of a lifecycle.

These stages are:-1.

2.EMBRYONIC STAGE

3.GROWTH STAGE4.MATURITY STAGE

5.DECLINE STAGE

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4 Stages of Industry Life Cycle

Maturity

Ma

rk

et

Si

z

e

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EMBROYNIC STAGE

Also called the take-off stage.

Organizations need to set up theirbase.

Important to build market share.

Investment & capital needs arehighest.

Returns are low & uncertain. Companies are first movers & fast

followers.

Technology is yet unproven & not

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Demand is being established.

Customers lack information.

Business models are unproven.

Business uncertainty is high.

Managerial decisions involve highrisks.

E.g.:- Organic Foods, Bioinformatics,green products etc.

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Customers learn to differentiatebetween product offerings.

Business models take shape.

Business is on more secure footing. Managerial decisions involve

moderate risks.

Market share increases.

Competitive advantage.

E.g.:- Automobile, IT, Retailing etc.

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MATURITY STAGE

Investment & capital decreasesignificantly.

Returns are lower & stabilized.

Technology developments are few &standardization is high.

Demand is stable.

Customers well aware of the optionsavailable.

Customers learn to choose &differentiate.

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Market shares of companies aresteady & jealously guarded.

Industry gets consolidated & isdominated by a small number oflarge companies.

Business Strategies:1. Cost leadership

2. Differentiation

3.Focus

Maturity period can range from verylong to an early demise,

depending on the industry.

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DECLINE STAGE

Also called Sick industries.

Refers to industries that havedeclined in performance or aredeclining.

Investment & capital practicallycease .

Returns decline considerably.

Technology developments becomesuperfluous.

Demand shrinks.

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Difficult to attract new customers.

Products lose their brand power. Market shares reduces in size as

industry demand shrinks.

Industry faces movement of firmsthrough Retrenchment strategies.

Business strategy is of low-cost.

Price based competition intensifies.

E.g.:- Mining, Paper & Pulp, Tobaccoetc.

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INFERENCES

Every industry goes through all 4stages of life cycle at some point orthe other.

What differs is the cycle period that itenjoys at every stage. No company can stay at maturity stage

and enjoy it for too long.

Hungry competitors are waiting to grabthe top notch. If a company is in declining stage, it

needs to go for innovation to bounceback in the market or else it will haveto exit.

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