industry life cycle


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Industry Life Cycle

The period of time from the introduction of an industry to its decline and stagnation. Different analyses posit different stages of an industry life cycle (usually four to five), but all emphasize that an industry has a beginning, with technological innovation; a period of rapid growth; maturity and consolidation; and finally decline and possibly death. For example, in the video cassette recording (VCR) industry, the mid-1970s were a period of decentralized technological innovation, with VHS and Betamax formats vying for dominance. Later, video cassettes very quickly became a common household item. In the maturity phase, different companies selling VCRs attempted to corner a greater market share for their own (identical) versions of the product. Finally, the industry declined and was eventually supplanted by DVD players. An industry life cycle can be prolonged by several factors, including opening new markets to the product, finding new uses for the same product, or even attaining government subsidies. The concept of an industry life cycles applies most readily to the sale of goods and it is difficult to gauge how it works in a service economy.

industry life cycle

The stages of evolution through which an industry progresses as it moves from conception to stabilization and stagnation. The stage in which a particular industry (and thus, a firm within the industry) currently exists plays a major role in the way investors view its future.
References in periodicals archive ?
Also a report by (Islami, 2008) to check the status of rail transport industry in Iran in the industry life cycle was studied in the position of "maturity" for the industry was identified.
The results for the possible interaction between intellectual resources and stage of the industry life cycle are presented in Table 3.
Clearly, the quality improvement of tires (and roads) starts in the beginning of this century when the industry life cycle was in its earliest phase.
Apparently innovative activity is promoted by knowledge spillovers that occur within a distinct geographic region, particularly in the early stages of the industry life cycle, but, as the industry evolves towards maturity and decline, may be dispersed by additional increases in concentration of production that have been built up within that same region.
The strategic implementation literature which has examined matching managers to strategy and/or industry structure has considered stage of the product or industry life cycle to be one of the most relevant dimensions of industry structure for that purpose (Wright, 1974; Kerr, 1982; Leontiades, 1982).

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