STUDY OF INDUSTRY COMPETITION IN VARIOUS STAGES OF THE INDUSTRY LIFE-CYCLE

Industry life-cycle is a concept which proposes that almost all industries progress through a predictable life-cycle, wherein, newly formed industries are fragmented, and consolidate as they progress and then mature with time and ultimately decline. The degree of competition being faced by a firm in an industry changes as an industry progresses through its life-cycle and the appropriate use of specific business strategies depends largely on the phase of the life-cycle of the industry in which the firm operates. The purpose of this paper is to understand the different stages of the industry life-cycle and study the changing nature of competition that prevails in each stage, analysing how the same impacts the survival strategies adopted by firms. The author familiarizes the readers with the concept of the industry life-cycle and the various forces which influence industry competition. Thereafter, the author carries out a detailed study of sample industries in the Indian economy which are in various stages of their life-cycle and analyses the competition prevailing among the industry players in each stage. The paper presents, through examples, the impact that the changing nature of industry competition has on the survival strategies adopted by firms in each stage of the industry life cycle. The paper concludes with the notion that business strategies of firms vary depending upon the corresponding stage of the industry life cycle, wherein, each phase requires a different approach to industry competition to ensure the existence and growth of the firm