Products become more standardized Distribution channels consolidate Production shifts to low-wage countries Price competition intensifies Bargaining power of distributors increase[r]
Trang 1Industry Evolution
Industry Evolution
• The industry life cycle
• Industry structure, competition, and
success factors over the life cycle.
• Anticipating and shaping the future.
OUTLIN
E
Trang 2The Industry Life Cycle
The Industry Life Cycle
• demand growth
• creation and diffusion of knowledge
Introduction Growth Maturity Decline
Time
Trang 3Product and Process Innovation Over Time
Time
Product Innovation
Process Innovation
Trang 4Standardization of Product Features in Cars
FEATURE INTRODUCTION GENERAL ADOPTION
Speedometer 1901 by Oldsmobile Circa 1915
Automatic transmission 1st installed 1904 Introduced by Packard as an
option, 1938 Standard on Cadillacs early 1950s
Electric headlamps GM introduces, 1908 Standard equipment by 1916
All-steel body GM adoptes 1912 Standard by early 1920s
All-steel enclosed body Dodge, 1923 Becomes standard late 1920s Radio Optional extra 1923 Standard equipment, 1946
Four-wheel drive Appeared 1924 Only limited availability by 1994 Hydraulic brakes Introduced 1924 Became standard 1939
Shatterproof glass 1st used 1927 Standard features in Fords 1938 Power steering Introduced 1952 Standard equipment by 1969
Antilock brakes Introduced 1972 Standard on GM cars in 1991 Air bags GM introduces, 1974 By 1994 most new cars equipped
with air bags
Trang 5How Typical is the Life Cycle Pattern?
• Technology-intensive industries (e.g pharmaceuticals,
semiconductors, computers) may retain features of
emerging industries.
• Other industries (especially those providing basic
necessities, e.g food processing, construction, apparel) reach maturity, but not decline.
• Industries may experience life cycle regeneration.
Sales Sales
1900 ‘50 ‘60 ‘90 1930 50 60 90
MOTORCYCLES TV’s
• Life cycle model can help us to anticipate industry
evolution—but dangerous to assume any common, pre-determined pattern of industry development.
Color B&W Portable
HDTV ?
Trang 6Evolution of Industry Structure over the Life Cycle
INTRODUCTION GROWTH MATURITY DECLINE
penetration replacement customers, resi-
demand dual segments
innovation process innovation innovation technology
rapid design change ation commoditization
URING intensive mass-production
TRADE -Production shifts from advanced to developing
consolidation exit
logy Design for uction, ration-
alization, low cost sourcing
Trang 7The Driving Forces of Industry Evolution
Customers become
more knowledgeable
& experienced
Diffusion of
technology
Demand growth
slows as market
saturation approaches
Customers become more price conscious
Products become more standardized
Distribution channels consolidate
Production shifts
to low-wage countries
Price competition intensifies
Bargaining power
of distributors increases
Excess capacity increases
Production becomes less R&D
& skill-intensive
Quest for new sources of differentiation