Industry Life Cycle

Topics: Automotive industry, General Motors, Innovation Pages: 11 (3539 words) Published: October 8, 2012
Table of Contents
A.Part A: Industry Life Cycle Framework - Critique3
2.0Industry Life Cycle Framework4
2.1Introduction Phase4
2.2Growth Phase4
2.3Mature Phase6
2.4Decline Phase7
3.0Conclusion and My Views – Part A7
B.Part B: Industry Level Analysis8
5.0Resource-Based View (RBV) of the American and Japanese Automobile Industry9 5.1Mass Production Capabilities - Economies of Scale9
5.2Lean Production Capabilities11
6.0Conclusion - RBV13
7.0SWOT Analysis of General Motors *GM) and Toyota14
8.0Conclusion – SWOT17
9.0Conclusion and My Views – Part B17


A. Part A: Industry Life Cycle Framework - Critique
1.0 Introduction
Industry life cycle is the stages that an industry will go through, like every human from the time they are born, grow, mature and eventually death which can also be seen in the industry. Each industry will go through these stages and some can be fast and some slow. Within the same industry, different firms maybe at different stages of the life cycle and the firm’s strategic plan are influenced by phases of the life cycle that the firm’s in. A product goes through the same life cycle as a firm or industry goes through. The life cycle can be viewed in a chart by the growth of the industry over time as shown in Figure 1.

Figure 1: The stages in Industry Life Cycle
In this assignment, I will be discussing the stages of the Industry Life Cycle Framework and the factors that drives the evolution of the Personal Computer (PC) industry (1974-2008) and the Automobile (Auto) industry (1899-2008). 2.0 Industry Life Cycle Framework

In this section, I will be discussing the life cycle of the PC and automobile industry in adjacent to see the similarities and differences in their development. 3.1 Introduction Phase
In the introductory phase of an industry, the sales and rate of market penetration are relatively low because the products are not known yet and customers are few. In this phase, some firms are known to be the “pioneers” in the industry and they have a different level of efficiency. The technological opportunities during this stage cause a lot of product innovation which creates the various versions of the same products (Kuratko, 2009). In the automobile and PC industry, the introduction occurred only after a period where the product was produced by someone after some experiment in their homes or garages. These early version of the product are produced by this groups or individuals and not by a commercial manufacturer. In 1899, the auto industry began their introductory phase for commercial vehicles only. During 1899-1923, the auto industry was seeing a rise in the entry of new firms in the objective of having a piece of the pie, but many were unsuccessful or fail. 3.2 Growth Phase

The growth phase starts when there is an accelerated market penetration as technical improvements are made and also the increase in efficiency. The market continues to grow as consumer gains more knowledge about the product. As economies of scale in production allow more consumers to purchase the products that were once deemed a rich man’s item when the cost and price of the products decreases tremendously through mass production. The world’s first mass production of automobile was in 1901 by Oldsmobile and in 1910, Ford produce the world’s first standardized car in the automobile industry, the Model-T. The product standardization has introduced economies of scale which contributes to the drop of cost and prices (Spinelli & Adams, 2012, pp. 362-363). The first few years of the PC industry were also experimental and the entry was determined primarily by the technological advancement, innovation and system compatible software. Micro Instrumentation and Telemetry Systems (MITS) produced their first mass production of...

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Kuratko, D. F. (2009). Entrepreneurship: Theory, Process, Practice. South Western: Cengage Learning.
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Spinelli, S. J., & Adams, R. (2012). New Venture Creation: Entrepreneurship for the 21st Century. New York: McGraw Hill.
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