THE INDUSTRY LIFE CYCLE

Everything has its beginning and its end,it will pass through stages. Just as we humans start from birth to death, an industry also does that. From its emergence stage to its decline stage.
    The industry life cycle comprises of four phases; the introductory(emergence) stage, growth stage, maturity stage and decline stage. Business strategy needs to try to understand, predict and manage change.
                The diagram below gives a visual of these stages in the industry life cycle;
                     

                         T


1. The Introduction stage; in this stage, sales are small and the rate of market penetration is low because the industry's product are little known and and customers are few.
2. The Growth stage is characterized by accelerating market penetration as technical improvements and increased efficiency open up the mass market.
3.The Maturity stage increasing market saturation cause the onset of the maturity stage. once saturation is reached, demand is wholly for replacement.
4.Decline in this stage as the industry becomes challenged by new industries that produce technologically superior substitute product, the industry enters its decline stage.
        There are two forces that drive industry revolution;
a. Demand growth
b. Creation and diffusion of knowledge

a. Demand growth; the life cycle and the stages within it are defined primarily by changes in the industry's growth rate over time.in the introduction stage, there is high costs and low quality, high demand and low supply. the growth stage, the demand is high and increasing and supply is low and increasing. Then, in the maturity stage, demand begins to decrease and supply becomes high. in the decline stage, demand decreases as well as the supply. If the industry involved decides to transform the demand/supply pattern, a change will occur in the cycle.
b. Creation and diffusion of knowledge; new knowledge is the form of process innovation is responsible for an industry's birth, and the dual processes of knowledge creation and knowledge diffusion exert a major influence on industry evolution. the two sectors  involved here are ; dominant designs and technical standards and also product to process innovation
- Dominant designs and technical standards; dominant designs refers to the overall configuration of a product or system. a technical standard is a technology or specification that is important for compatibility.
-product to process innovation;  the emergence of a dominant design marks a critical juncture in an industry's evolution. once the industry marks a critical juncture around a leading design, there is a shift from radical to incremental product innovation.

Robert M. Contemporary Strategy Analysis,7th Edition

http://www.youtube.com/watch?v=CRfjJ9yOyp0

he introduction sage