Life Cycles

Question 1

Company Life Cycle - Assumptions (3)

Answer 1

• Organizations develop in distinctly different phases over time
• Sequence and order of development ist predetermined and thus predictable
• All organizations develop according to fixed rules that drive their progression through the development stages

Question 2

Company Life Cycle - Stages (5)

Evolution vs Revolution

Answer 2

1) Creativity vs. Leadership
2) Direction vs. Autonomy
3) Delegation vs. Control)
4) Coordination vs. Red tape
5) Collaboration vs. ?

Question 3

Company Life Cylce - Key drivers

• Exogeneous (3)
• Endogeneous

Answer 3

Exogeneous:

• industry growth rate (high steepness)
• age of organization (medium steepness)
• size of organization (low steepness)

Endogeneous:
Inherent process dynamics of the developmental stages - the specific practices of every phase emerge from the preceeding phase and trigger the subsequent phase

Question 4

Product Life Cycle - Stages (5)

Answer 4

1) Product development
2) Introduction
3) Growth
4) Maturity
5) Decline (& replacement)

Question 5

Technology Life Cycle - Stages (3+1)

Answer 5

1) Substitution: Old vs. new (VHS vs discs)
2) Design competition: competing standards (DVD vs multicompact discs)
3) Incremental change

–> S-Shaped curves with each new curve higher on the y-Axis of technological performance

Question 6

Industry Life Cycle

• General (3)
• Stages (4)

Answer 6

• Supply side equivalent to product life cycle
• Stages defined by industry growth rate
• Industry life cycles can extend beyond individual product life cycles

1) Introduction
2) Growth
3) Maturity
4) Decline

Question 7

Industry Life Cycle - Introduction stage

• Rivals
• Sales
• Entrants
• Buyers
• Offerings
• Evolution

Answer 7

• Rivals: Small entrepreneurial firms dominate
• Sales: Low and slow initial growth
• Entrants: Possibly numerous, product innovation is key
• Buyers: Mostly unsophisticated users, some early adopters potentially very sophisticated
• Offerings: Wide variety
• Evolution: When standards evolve

Question 8

Industry Life Cycle - Growth stage

• Rivals
• Sales
• Entrants
• Buyers
• Offerings
• Evolution

Answer 8

• Rivals: Larger firms dominate
• Sales: Rapid growth
• Entrants: Much less likely than in previous stage. Scaling and non-core capabilities are key
• Buyers: Demands become more sophisticated
• Offerings: Standardized offerings, usage becomes easier
• Evolution: When growth rates drop and firms move to customization

Question 9

Industry Life Cycle - Maturity stage

• Rivals
• Sales
• Entrants
• Buyers
• Offerings
• Evolution

Answer 9

• Rivals: Tendency to merge
• Sales: Stagnation, movement to higher margin offerings
• Entrants: Few/non-existent. Intense price competition
• Buyers: Users demand more value
• Offerings: Mass customization
• Evolution: When customer information systems develop

Question 10

Industry Life Cycle - Decline stage

• Rivals
• Sales
• Entrants
• Buyers
• Offerings
• Evolution

Answer 10

• Rivals: Mixture of small and large firms
• Sales: Profitable niches in competitive markets
• Entrants: Destructive price competition, new entrants occur
• Buyers: Knowledgeable, very demanding users
• Offerings: Certain service and experience orientation dominates
• Evolution: New industry life cycle likely