Shared Flashcard Set


Chapter 2 External Analysis pg. 64 - 70
MGT 499 International Business Test 2
Undergraduate 4

Additional Management Flashcards




Limitations of Models for Industry Analysis
  • Life-Cycle Issues
  • Innovation and Change
  • Company Differences
Life-Cycle Issues

It is important to remember that the industry life-cycle model is a generalization. In practice, industry life cycles do not always follow the pattern illustrated in Figure 2.3. In some cases, growth is so rapid that the embryonic stage is skipped altogether. In others, industries fail to get past the embryonic stage. Industry growth can be revitalized after long periods of decline through innovation or social change. For example, the health boom brought the bicycle industry back to life after a long period of decline.


The time span of these stages can vary significantly from industry to industry. Some industries can remain mature almost indefinitely if their products are viewed as basic necessities, as is the case for the car industry. Other industries skip the mature stage and go straight into decline, as in the case of the vacuum-tube industry. Transistors replaced vacuum tubes as a major component in electronic products despite that the vacuum tube industry was still in its growth stage. Still other industries may go through several shakeouts before they enter full maturity, as appears to currently be happening in the telecommunications industry.

MacroEconomic Forces
  • Interest rates
  • Currency exchange rates
  • Price Inflation - economy
  • Price Inflation - economic activity
The MacroEnvironment
  • Macroeconomic Forces
  • Global Forces
  • Technological Forces
  • Demographic Forces
  • Social Forces
  • Political and Legal Forces
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