The Impact of an Industry’s Life Cycle on a Company

4 May

This post is a nice complement to our discussion about Apple’s recent performance. How much do industry life cycles affect firms in those industries?

Consider these remarks from , Contributing Writer, SmallBizTrends.com:

“Every industry goes through a life cycle that begins at the startup phase — that is, when the industry first comes into existence. Obviously, some industries’ startup phase was decades or even centuries ago, such as homebuilding or restaurants. However, even within those types of industries, there are special niches that can continually come into existence — think of them as sub-industries. For example, while homebuilding as a business has been around for centuries, environmentally friendly homebuilding using reclaimed or recycled materials and solar energy is a relatively new niche within that industry.”

“Next can come a phase of rapid growth. Inspired by the success of industry pioneers, other entrepreneurs may follow suit and launch companies in that field. Eventually, the industry reaches maturity. It may not be brand new and exciting anymore, but it can also offer stability and a good chance for business success.”

 
According to Lesonsky, there are three types of industry decline:

Rapid Decline. “Often this is precipitated by some drastic event, or combination of events — such as the way the travel industry, and in particular travel agencies, declined after 9/11. At the same time, the growth of online travel search and booking sites helped those who needed to travel to book their own plans without an agent.”

Slow Decline. “Slow declines can be the most common type of industry transformation. They can occur for many reasons, including a change in target market demographics or attitudes, new inventions or technology, or dwindling resources that the industry needs. Print publishing is an industry in slow decline: Although print magazines and newspapers still exist, online publishing, which costs less and is more accessible, has made print less profitable.”

Reinvention. “Sometimes an industry starts to decline, then reinvents itself, leading to a new lease on life — and new opportunities for profits. TV broadcasting is reinventing itself after a slow decline due to the popularity of online video and streaming services. Traditional broadcast networks are joining the game by offering at least some of their content to these services.”

 
Click on the image to learn more.


 

17 Responses to “The Impact of an Industry’s Life Cycle on a Company”

  1. Emily Baldwin May 5, 2016 at 2:08 pm #

    To relate this to the Apple article posted the day before this one, I think that Apple will reinvent itself. I’m sure it will still be centered around electronics but maybe they’ll move into bigger ideas such as virtual reality or continuing to work on the Apple Glass that they made a while ago. If they can find a way to innovate those ideas, they will be able to reinvent their product lines and continue to make a great profit.

  2. Joe (Tianyuan Zhou) May 6, 2016 at 5:14 pm #

    This article can be a good explanation on Apple’s recent decline. Apple has been rapidly growing for the past few years. It was like a miracle how rapidly it grows and takes over the market. Now I think Apple is facing slow decline in its industry life cycle. It doesn’t mean that people don’t trust the company and its product anymore. It probably because the company needs some forms of reinvention. The latest iphone SE has the similar design of iphone 5 and iphone 5s which I think is the main reason why consumers don’t have interest in buying the new iphone. I believe the condition will be better if Apple could think of a way of re-designing or add some new features to their next generation of iphone.

  3. Summer May 8, 2016 at 1:20 am #

    Most of industry have their own life cycle. For instance, the traditional roll film has a rapid decline after the popularity of digital camera. Individuals always need to live that the house will not be declined. But the style of house may need to be change that can be a niche to attract people. People who has new ideas and carry it on reality can succeed in the world!

  4. Shusen Zhao May 8, 2016 at 8:00 pm #

    There is no company or industry can always stand on the crest, even Apple. When it becomes so successful, there will be new competitors or followers whom have similar ideas and competitive advantages. Although Apple has unique system, the total customer number is fixed. If there is no revolutionary innovation, companies would next show slow decline or rapid decline. In my opinion, besides reinvention, one solution to slow the cycle is own more loyal customers, because only the loyal customers would choose your products without consider many factors when there is competition.

  5. Daniel Hanson May 9, 2016 at 1:44 am #

    In order to be a successful firm, you have to be open to new ideas and innovation. If you stick with the same product or idea for an extended amount of time, there is a good chance that you may fall behind your competitors if they are coming up with new, hot stuff. There are always loyal customers that stand by you no matter what. However, you can’t only rely on your loyal followers. You have to grow in order to be successful.

  6. Zening Zheng(Howard) May 9, 2016 at 4:29 am #

    Well, I think if Apple wants to reduce decline, the first thing to do is focus on introduction stage. Apple has been incredibly important — especially over the past decade — to America’s competitiveness in terms of global technology leadership.I think the most important way that Apple has benefited America is in terms of technological competitiveness.

  7. Aidan Kirk May 9, 2016 at 11:19 am #

    Regardless of the industry every company eventually goes through the stages of a product life cycle. It starts with the idea, then comes the rapid growth of that product or service, then comes the decline and hopefully the recovery. Companies like even Apple tend to go through these phases over time. I feel that the best way to stay ahead of the cycle is by always improving your product or releasing new products every year that the consumer will fall in love with. It is challenging but the good companies have always found a way to stay successful.

  8. Jenny Rauch May 9, 2016 at 11:36 am #

    To relate this to apple it explains a lot of what is going on with the company. I believe apple has been slowly declining because of the companies bringing out new technology and apple is falling behind with that recently over the past few years. The iPhones over the past few years haven’t changed much and the technology isn’t that fascinating compared to others. People still buy apple because they love the brand and its simpler than other phones but apple definitely needs to reinvent themselves to do better in this industry. I do think apple with eventually bounce back and come out with a great product that will amaze everyone.

  9. Qian Liang (Rachel) May 9, 2016 at 4:58 pm #

    I think most business want to keep in the growing phase as long as they can, and try to avoid a rapid decline. In order to do that, leaders need to have long-term plans for business development. There is an old saying in Chinese, “we buy umbrellas in sunny day.” Even when business is going well, we need to think about how to divers product matrix, how to gain market shares through entering different marketplaces, even how to create a primary market. Usually a good leader has a big version of the future of business. For example, Jack Ma is planning to introduce virtual reality (VR) wearable devices into online shopping industry. It can change our shopping habits in the future.

  10. HANJUN DU (Doris) May 9, 2016 at 6:03 pm #

    Apple company has grown so rapidly in recent years, and is has absolute advantages over its competitors. The rapid growth of Apple is the same as that of Nokia some years ago. In my memory, all my friends used Nokia when I was in high school. However, all my friends use iPhone now. There’s no doubt that Apple wants to keep holding the market as long as it can, therefore the company should reinvent the product lines and change the appearance of every new product. Although keeping loyal customer is very important, the company should not ignore how to attract more and more new customers who in favor of Samsung, Blackberry and so on.

  11. Sydney Vorbe May 10, 2016 at 1:58 pm #

    To relate this to apple, it explains a lot of what is going on with the company. Apple has been declining because of other companies bringing out new technology. Apple’s product haven’t been small changing much apart from the design of it. People are loyal to apple because of its user-friendliness. In order to keep up with other technologies apple will have to reinvent itself and bounce back from this decline because although keeping loyal customer is very important, the company should not ignore how to attract new customers.

  12. Jing Xu May 10, 2016 at 7:29 pm #

    This article give indicates to executives of both startups and industry leaders. Everything is developing. No industry can avoid decline. For those startups, it is important to identify which stage its industry in. And if startup firm plan to enter a declining industry, they have to pay more attention on exit strategy instead of long- term strategy. For those industry leaders, the decline of industry does have impact on them, but it won’t hit those companies badly. Since industry leaders have already build their own ecosystem. When industry of their core business decline, they can easily shift their focus on other industry. Like Apple, it will shift its focus from electronic devices to other e-commerce niche like Apple Pay.

  13. Michael Lillis May 10, 2016 at 9:39 pm #

    This article is really interesting to me because you often see companies go through these cycles, having to fight with economic factors and industry competition to stay afloat. Of the three declines listed in the post, the rapid decline seems to be the hardest to prevent, as it is often triggered by outside forces, like the author suggested. But being able to reinvent your company is key, in my mind, to having a long an successful business. The article touches on cable companies, but that is a bad example because the government protects their business and each major company basically doesn’t compete with other companies (on purpose). But if you take Google, they have reinvented themselves from just a search engine to be something more; smartphone makers, tech company, marketplace, etc. It is pretty amazing to me to see some companies change their entire product line-up in order to stay relevant or keep up with the times.

  14. Kajal Shah May 11, 2016 at 2:43 pm #

    One thing about life is that it’s very unpredictable. And because of those unpredictable events, many industries and businesses get effected. Chipotle, for instance, dropped in their status and stocks like crazy. Last year they had to give around 1 million free burritos just to try and bring back their customers. And all of this only happened due to the event of E. coli breakout.

  15. Vanessa Bastos May 11, 2016 at 5:07 pm #

    Apple is currently going through a phase where they need reinvention. Competition is at an all time high and despite features not being a necessity we see Samsung introducing a waterproof cellphone while apple seems to be falling behind with innovative qualities. People who still purchase apple products are those whose brand loyalty has been established prior to the industry decline. In the articles that came out concerning their first decline in sales after years of steady rising apple received a lot of criticism and with that i think they will bounce back with innovative products to satisfy the new demand that has been created by competitors.

  16. Megi Kurashvili May 11, 2016 at 5:37 pm #

    In my opinion, no company has perfect years. Every company goes through declines and rises and perfect year. I think Apple was also one of these companies, where it had a year or a period of time where there was shortages or declines, but it will be able to get back up with their future inventions, due to their reputation and the past products that they have been able to come out with.

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