Elements Lifecycle – Industry:

Buyer, competitor and internal needs compared to Industry lifecycle.

Relevant to map product or company portfolio to different lifecycle stages.


Emerging industry characteristics:

  • Strong technological uncertainty (absence of dominant design – Abernathy, 1975 – Wiki)
  • Strategic uncertainty
  • High Initial costs, but steep cost reduction
  • Many embryonic companies and spin-offs
  • First-time, badly informed buyers
  • State intervention (subsidy)

Embryonic (mature with fundamental change)

  • Rapid growth
  • Changes in technology
  • Great pursuit of new customers
  • Fragmented and changing shares of market

Growth Industries

  • Widening buyer group
  • Consumer will accept uneven quality
  • Products have technical and performance differentiation
  • Reliability is the key for complex products
  • There is continuous competitive product improvement
  • Search for good quality
  • Hig advertising, but lower percentage of sales than in the introductory phase, advertising and distribution are the key for non-technical products
  • Under-capacity in manufacturing
  • Shift towards mass production
  • Use of mass channels
  • Competition is through new entrants creating many competitors
  • Mergers and takeovers are prevalent and some firms will be casualties
  • Risks can be taken because growth conceals them
  • Major strategic thrust is to grow faster than your competitors

Mature industries (Porter, 1980)

  • Slowing growth means more competition for market share
  • Firms in the industry increasingly are selling to experienced repeat buyers
  • There is a problem in adding to industry capacity or personnel
  • Manufacturing, marketing, distribution, selling and research methods are often changing
  • New products and applications are harder to come by
  • International competition increases
  • Industry profits fall during the transition period, sometimes temporarily and sometimes permanently
  • Dealers’ margin fall, but their power increases


Emerging – set industry rules by:

  • Product policy
  • Marketing approach
  • Pricing strategy

Embryonic – Largest strategic benefit (Porter)

  • Shaping industry structure
  • Balancing industry versus firm interests
  • Changing roles of suppliers and channels
  • Shifting mobility barriers
  • Timing entry


Insight in future profitability, cash-flow, marketing, competition

1: To determine approach according to life stage

2: Provide overview of portfolio – Competitive situation is addressed by SWOT analysis – indicates following lifestage/future trends to be expected

Source Lifecycle – Industry:

Henley Business School – Learning Resources