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Industry Lifecycles Analysis (Purpose (Predict (no of orgs at each stage,…
Industry Lifecycles Analysis
Purpose
Current stage in life
Level of competition
Predict
no of orgs at each stage
Type of orgs at each stage
Estimate
Future
Competition
Lifecycles
DYNAMICS OF COMPETITION
Introduction/Development
Potential industry offerings
Attract
educate
Early adopters
High investment
Profits low
Limited competition
Growth
High competition
But still growth potential
High demand
Customer adopted
Dominant design
makes introduction go to growth
Less risk to customers
Trusted
Buy more
Network effect - apple - all products linked
Tech standard
but copycats
Bahaviour
Large players interest
invest in improvements to product
Tech capabilities
Increased investment
Profits expand
Market share expands
Maturity
Demand stablises
growth of sales decline
Still profits to be made
Excess of capacity = end of growth
Reduce prices
Start competing on price
Price wars
Production offshored
Behaviour
Demand = replacement goods/substitutes
Tougher competition
Shakeouts
Exit
Merger
Collusion
Oligopoly
Saturated
Less attractive
Competitors established
efficient
Loyal customers
Decline
Behaviour
Social change
Tech change
New industries
High competition
Unattractive market
Excess capacity
Leave market
hard
Highly invested
High fixed costs/sunk costs
Offshore production
save money
Critique = lifecycle model
life cycles
fast paced
miss stages
some don't decline
food
Rejuvinate
mobiles
cars
Geography matters!
growth in one
Maturity in another
Doesn't apply to all industries
Hypercompetition
Competitor moves
Rapid
Intense
Risk to all businesses
Disruptive changes
Not a step by step process
Not a stable environment
Drivers
Tech
Lower barriers
Globalisation
Rising customer expectations
Large players
Financial resources
Multi faceted attach