Business Lifecycle Flashcards
What are the five stages of the business lifecycle?
Seed, Start up, Growth, Maturity, Post Maturity
What challenges do businesses face in the seed phase?
High startup costs, low brand awareness, difficulty securing funding, and cash flow issues.
How do businesses expand during the growth phase?
A: By increasing market share, hiring staff, improving operations, and expanding product offerings.
What is market saturation, and how does it affect businesses in the maturity phase?
A: Market saturation occurs when demand for a product levels, forcing businesses to innovate or diversify.
What are three potential outcomes in post-maturity?
A: Renewal (revitalization), Steady State (maintaining current position), or Decline (business failure).
How can a business avoid entering decline?
A: By innovating, adapting to market changes, and improving efficiency.
What role does competition play in business lifecycle stages?
Strong competition can force businesses to evolve or risk losing market share.
Why is financial management crucial in the transition from establishment to growth?
To ensure cash flow remains stable and avoid over-expansion.
What is the importance of customer retention in the maturity phase?
A: It ensures consistent revenue and prevents market share loss to competitors.
How do external factors (e.g., economic conditions) impact a business’s lifecycle?
A: Economic downturns, government regulations, and technological advancements can influence a business’s success or failure.
