This week we will discuss about the competitive and technological forces of the business

environment.

There are four different stages of the industry life cycle model including the introduction,

growth, maturity, and decline.

Introduction - Due to a lack of knowledge with the new product's capabilities and

performance, customer demand is constrained. Distribution channels still need to be

improved. Additionally, there aren't enough complementary goods available to clients, which

reduces the profitability of the new product. Due to the significant initial capital spent in

technology, equipment, and other fixed costs, start-ups are more likely to earn no or very

little revenue and have negative cash flows and profitability.

Growth - The industry enters a stage of growth where profitability begins to increase as the

product gradually draws interest from a larger market segment. Customers will value a

product more as a result of feature improvements. People can now purchase the product and

its complements with more benefits as complementary products start to appear on the market.

Price decreases in response to rising demand, which drives up consumer desire even more. As

product revenue and costs approach break-even during the growth stage, businesses begin to

generate positive cash flows and profits.

Maturity- When an industry enters the maturity stage, the bulk of its businesses are well-

established, and it has reached saturation. By implementing tactics to prevent the entry of

new competitors into the sector, these businesses work together to try and manage the level of

industry rivalry to defend themselves and retain profitability. They also create plans to get an

advantage over opponents and lessen conflict. Since client demand is relatively high and

steady at this point, businesses generate their highest levels of revenue, earnings, and cash
flows. Products become more widely used and well-liked by consumers, and prices are

generally fair.

Decline - The final stage of an industry's life cycle is the decline stage. The rate of decline,

the height of exit barriers, and the amount of fixed costs all affect how fiercely a market is

competitive. Some businesses may decide to concentrate on their most lucrative product or

service lines in order to maximise earnings and survive the downturn. Some larger businesses

will look to acquire weaker or smaller rivals in an effort to gain the upper hand. Divestment

will be the best option for individuals who are experiencing significant losses and don't think

there are any chances to survive.

Technology has changed the workplace scenario as it now needs less human resources,

because it has automated machines, which can be both cost and time effective. Technology

has also changed the organizational structure of the workplace. Especially, during and after

the pandemic, because of the advancements in technology many employees started working

from home.

References:

Sexty, R. (2020). Canadian Business & Society: Ethics, Responsibilities, and Sustainability.

5th Edition. Toronto, ON: McGraw Hill Canada.

Karakowsky, L. and Guriel, N. (2020). Business in Canada & Across the World: A Student's

Guide. First E-book edition. Concord, ON: Captus Press.

Industry life cycle. Corporate Finance Institute. (2022, February 7). Retrieved August 29,

2022, from https://corporatefinanceinstitute.com/resources/knowledge/strategy/industry-life-

cycle/