Competing during the transition to industry maturity
- When competition in the industry increases, firms can have a sustainable competitive advantage that will provide a basis for competing against other companies.
- The new products and applications are harder to come by, while buyers become more sophisticated and difficult to understand in the maturity stage of the industry lifecycle. Thus, consumer research should be carried out and this could help companies in building up new product lines.
- Slower industry growth constrains capacity growth and often leads to reduced industry profitability and some consolidation. Therefore, companies can focus greater attention on costs through strategic cost analysis.
- The change in the industry is rather dynamic, and an understanding of the industry lifecycle can help companies to monitor and tackle these changes effectively. Firms can develop organisational structures and systems that can facilitate the transition.
- Some companies may seek business opportunities overseas when the industries reach the maturity stage because during this stage, the demand in the market starts to decline.
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