Business Life Cycle
The business life cycle refers to the stages that a business goes through from its inception to its eventual closure. These stages typically include the startup phase, growth, maturity, and decline. Understanding the business life cycle can help entrepreneurs and business owners make informed decisions about strategy, resource allocation, and succession planning.
6 Key excerpts on "Business Life Cycle"
eBook - ePubManaging Start-ups for Success
Entrepreneurship in Difficult Times
- Rajat Kanti Baisya(Author)
- 2021(Publication Date)
- Routledge India(Publisher)
...7 MANAGING GROWTH AND TRANSITION OF START-UPS Business transition and growth New enterprises will pass through several transitional phases represented by the organisational life cycle with its associated challenges to their promoters. To create a successful venture, promoters have to manage their business through all the stages efficiently to ensure survival and deliver sustainable growth. Like a normal product life cycle, a new product will pass through introduction or inception, growth, maturity and decline. Organisation life cycle normally follows a well-known pattern of early growth, rapid growth, maturity and decline. In the initial period, most businesses experience a period of slow growth if the product is acceptable, supported by healthy repeat purchase rate. This should be followed by a rapid growth phase, although the intensity and duration of the growth might differ from product to product or organisation to organisation. If the product does well during the rapid growth phase, there is likelihood of new competition entering into the category which will change the ball game, requiring a different set of management skills to keep the business growth on track and also keep competition at bay. However, if the start-up venture is already in a me-too category, the entrepreneur has to develop a realistic competitive strategy for the business to direct and implement the strategies to deliver the targeted or budgeted level of performance in all phases. Businesses make maximum profit during the growth and maturity phase, which will be normally followed by decline for some product categories, and it is the entrepreneur’s responsibility to see that the maturity period is extended by implementing several creative executions to prop up and extend the maturity graph or period to profit from this extended growth for a longer period of time and arrest the decline...
eBook - ePub- Kenneth Kahn(Author)
- 2014(Publication Date)
- Routledge(Publisher)
...The focus of the marketing effort is to create awareness and get trial. During the growth stage, sales rise steadily, and the focus becomes to maximize market share. The maturity stage represents a leveling of sales, and the focus is profit maximizing and market share maintenance. The decline stage is the final stage characteristic of decreasing unit sales. In the decline stage the focal marketing strategy is to harvest the product, which represents a reduction in marketing expenditures while revenues are sustained for as long as possible. The product life cycle also can be used to describe the possible development of an emerging market. In particular, the framework suggests that competition will be low in the introduction stage, but fierce during the growth stage as competitors see the growth potential of the respective market. During the maturity stage, the number of competitors will be reduced through mergers, acquisitions, and companies dropping out of the market. Market share at this point will be pretty much determined, with intense efforts needed to make headway into securing additional market share. The decline stage represents a declining number of competitors as companies leave the market. Exhibit 11.1 The Product Life Cycle It is important to use the product life cycle concept as just a guideline, not a definitive model. By inappropriately using the product life cycle, various companies have incorrectly determined that their product was declining, pulled resources from the product, and prematurely terminated their product. In one case, a toothpaste manufacturer saw sales decline over a period and concluded—based on the product life cycle theory—that the product was in the decline stage. The company consequently reduced the amount of resources going to the product, which contributed to a further reduction in sales...
- Darren Dalcher, Darren Dalcher(Authors)
- 2022(Publication Date)
- Routledge(Publisher)
...The life cycle represents a path from the origin to the completion of a venture. Division into phases enables managers to control and direct the activities in a disciplined, orderly and methodical way that can be responsive to change. Phases group together directly related sequences and types of activities to facilitate visibility and control, thus enabling the successful completion of the venture. The project life cycle acts as an important management tool focusing on the allocation of resources, the availability of key individuals, the integration of activities, the support of timely decision-making, the reduction of risk and the provision of control and governance mechanisms. The additional benefits associated with using a life cycle approach include (see Dalcher, 2002): Attaining visibility Breaking work into manageable chunks Identifying the tasks Providing a framework for coordinating and managing Controlling project finance Identifying and obtaining correct resource profiles Encouraging systematic evaluation of options and opportunities Addressing the need for stakeholder review Providing a problem-solving perspective Verifying ongoing viability on a progressive basis Encouraging continuous monitoring Managing uncertainty Providing a common and shared vocabulary Control is attained through the division into phases and the breaking up of work into identifiable and significant milestones and meaningful deliverables (products delivered at certain times). Partitioning activities into phases gives the impression of a natural order of thought and action. The spacing of activities along a time axis suggests the mutual exclusivity of stages and the primarily unidirectional flow of activities. Each phase has specific content and management approaches with clearly identified decision points between them. Matching the content requires the application of an ever-changing mix of resources—skills, tools, expertise, money and time...
eBook - ePubBusiness Ecosystems
Constructs, Configurations, and the Nurturing Process
- K. Rong, Y. Shi(Authors)
- 2014(Publication Date)
- Palgrave Macmillan(Publisher)
...The partners’ network is organised as a fixed supply chain. As a result, the industry is very stable. Also, the rest of the business ecosystem can be very supportive and mature for future industry development. In Status 5 (Post-renewing), if new ideas successfully upgrade the existing industry, this status is exactly the same as Status 0. Another life cycle will then begin. If new ideas cannot upgrade the existing industry, this status will be the recession of the industry. With learning from the three main case studies and their nine projects, the BELC is proposed as having five phases: Emerging, Diversifying, Converging, Consolidating and Renewing. Figure 8.2 presents the sequential phases, phase-ending status (connecting between phases) (horizontal view) and market scale (vertical view). Figure 8.2 The business ecosystem life cycle and phase status 8.3 Discussion of life-cycle study There are many life-cycle concepts such as the product life cycle (PLC), technology life cycle (TLC), firm life cycle, industry life cycle (ILC) and business ecosystem life cycle (BELC). Table 8.2 makes the comparison between those different life-cycle studies. PLC based on the evolution of sales consists of four sequential stages: introduction, growth, maturity and decline with an S-curve shape (Levitt 1981; Polli & Cook 1969). PLC links with Roger’s innovation diffusion theory, as product scale growth indicates the way innovation and technology are adopted. It demonstrates the key relationship between innovation and industry maturity (Rogers 1962). TLC reflects the PLC with six similar stages: technology development, technology application, application launch, application growth, technology maturity and degraded technology (Harvey 1984). Furthermore, scholars also analyse the extension of TLC through technology transfer from developed countries to less developed countries...
eBook - ePubCreating Theoretical Research Frameworks using Multiple Methods
Insight from ICT4D Investigations
- Sergey V. Samoilenko, Kweku-Muata Osei-Bryson(Authors)
- 2017(Publication Date)
- Auerbach Publications(Publisher)
...Nevertheless, the fundamentals of the model, such as dynamic competitive advantage, investments abroad, and importance of economies of scale, remain intact. Product Life Cycle Model: An Overview of the Stages and Common Criticisms According to PCT, every product on the market could be placed in one of the three categories—new product, maturing product, and standardized product. The categories primarily have to do with the patterns of trade and investments associated with the product, and not the life of a product itself. The three categories of Vernon are commonly mapped to the four stages in the product life cycle (PLC) model— introduction, growth, maturity (sometimes partitioned into maturity and saturation —the later stage of maturity), and decline. This categories-to-stages mapping is important, for it provides a bridge between Vernon’s categories of a product, which are primarily geared toward economics and finance, and the stages in the life of a product, which are marketing and business oriented. The importance of bridging these two perspectives is intuitive—the stages and categories, taken together, offer a more complete perspective on what is happening with the product over a period of time, for finance and economics go together with marketing and business. For a critical review of the relevant literature, we refer our readers to Gardner (1987), who reported that the first conceptualization of the product life cycle was made by Kleppner (1931), and the actual term appeared for the first time in the work of Jones (1957). Unlike Vernon’s conceptualization of a product as of a manufactured good, the concept of a product as it is used in the PLC model is broader—Gardner (1987) reports a virtual consensus on using the definition of Kotler (1984), according to which a product could refer to “physical objects, services, places, organizations and ideas” (Gardner 1987, p. 4). At this point, we offer an overview of each of the four stages of the PLC model...
eBook - ePubMastering Business Analysis Versatility
Seven Steps to Developing Advanced Competencies and Capabilities
- Eugenia C. Schmidt(Author)
- 2019(Publication Date)
- J. Ross Publishing(Publisher)
...3 STEP TWO—ADAPT TO THE LIFE-CYCLE APPROACH “Although the chef and the cook both start with an initial recipe, the chef’s expertise allows for the creation of a full menu by making necessary changes and adaptions based on elements such as customer feedback and tolerance for changes to the menu, customer cost constraints, the need for innovation, available equipment, etc.”— Chapter One If you, as someone performing those all-important business analysis activities, can adapt quickly to the various life-cycle approaches and provide advice about the right-fit approach, you have progressed to having the capability of business analysis versatility. Even if leadership for the business analyst (BA) is not in a position of authority at the tactical level, the BA is viewed as an important advisor to the project manager (PM) and sponsor by having a trusting relationship with them and all other stakeholders for the project. But, first and foremost, the BA must have a good understanding of life cycles. LIFE-CYCLE APPROACHES AND STAGES Life cycles include stages to deliver a new solution or a change to an existing product or service. Stages include needed activities to accomplish a new solution or change goals. In some more formal life cycles, go or no-go gate decisions are included at the end of each stage that requires a deliverable review and approval. Full life cycles can start with an idea-inception stage and end once the solution has been implemented, becomes operational, and the implemented solution’s value has been assessed. As a BA, you may or may not be involved in a full life cycle depending on your organizational role. An example of a very early model of a life cycle for software development was first recognized in a paper written by William W. Royce in 1970, 1 that describes a framework of phases for software development. Although Royce never mentioned waterfall, it has become known as the waterfall model or approach...
