Volatility of Industry Structures and

Lifecycle Stages
Module IV
 Course Objectives
• Enable students to understand and apply conventional principles of strategic
thought with an overlay of the dynamic technological, economic and
operational forces that influence business initiatives and outcomes.

• Developing a better understanding of changing business environment and its

influences on strategic analysis leading to strategy formulation and
execution.

• Enable students to undertake strategic analysis, build and examine

alternatives and frame right strategic choices for sustained competitive
advantage
 Student Learning Outcomes:
• Develop an understanding of changing strategies due to complexities arising
out of changing economic, social and technological business environment.

• Analyze the external and internal factors impacting strategy formulation and
execution

• Appreciate the use of current technological advancements in Big Data, Block

Chain, IOT and Machine Learning in designing, implementing and controlling
strategy at various levels
Phases of the industry life cycle
 At Introduction/Embryonic stage :

• Innovation is the highest,

• High focus on distribution channels,

• Large investment in marketing to establish consumer

awareness.
 At Growth Stage :

• Sales rate increases for strong firms,

• Market share grows,

• Industry standards are set,

 At Shakeout Stage :
• Strong firms start to gain more market share,

• Strong innovation, marketing, customer support, product

quality, and after-sales support is needed to increase
sales,

• Competition increases and companies use marketing and

pricing techniques to grow among the competition.
 At Maturity Stage :
• Consumer awareness is maximum,

• The firm enjoys an oligopoly market,

• Alternatives of the product are little or none,

• Industry growth is flat.

 At Decline Stage :
• A new alternative product has immerged,
• Rules and regulation changes,
• Issues with the supply of raw material,
• Increased level of competition from other firms and more.

In the decline stage; a firm has four strategic options; Exit, Harvest, Maintain,
Consolidate.
Source: Image by Sabrina Jiang © Investopedia 2020
 Volatility in technological era

The rapid penetration of computing technologies, advances

in data analysis, changes in customer preferences, social
connectivity and virtual communications among other
factors are accelerating the pace of evolution in many
industries and shortening their life cycle at speeds not seen
before.
 References
• https://www.investopedia.com/terms/i/industrylifecycleanalysis.asp

• https://www.iedunote.com/industry-life-cycle

• https://strategyforexecs.com/industry-life-cycle/

• Wu, Sun. Strategy for Executives

• McGrath, Rita Gunther. The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business. Harvard
Business Review Press
THANK YOU