Question

1. How much of an impact does the "maturity" level of the industry or company have on strategy? 2. How can you be innovative in a mature industry? 3. How can you be conservative in an introductory/rapid growth situation? 4. Should you be conservative??? Back up your assertions with resources and readings from the course, and your own research or experience. Please number each response and provide one space between responses. (Please type response)

Answer 1

1. We have 4 phases in a company life cycle:

(a) Expansion

(b) Peak

(c) Trough

(d) Recovery

Under each of the phases the company must strategise to attain organisation objectives.

In the expansion phase, the company must maintain their level of sales and to venture out in new business opportunities.

In Peak phase, the company must maintain enough cash flow sources.

In Trough, the company must keep check on its spending patterns and minimize discretionery spending.

In Recovery, the company must judiciously utilize all its available resources to reach its maximum potential.

2. In a mature industry, a company must venture in new technological innovations that can strategically provide an edge to the company. The company must spread it wings in different technological pursuits that can potentially help in lowering costs or increase sales or help in new business opportunity altogether.

Under a rapid growth situation, the company can be conservative by intentionally lowering their margins to attain market share of the industry. Under such circumstances, even when industry is going through trough, the company can sustain over other competitors.Yes, the company should be conservative in growth situation at the same time, the company must venture their pursuits in different opportunities.

For example, Google is an internet search engine. Though, through most of its revenue comes from its advertising. However, the company knows peak stage for the industry is near and all the growth will eventually slow down. Hence the company has various new projects, innovations around the internet like Google Loon, Google Waymo- the self driving car.

Eventually, venturing out in different business opportunities would allow the company to diversify. Even if there is trough in one industry, the company can have sources of cash flow from other business pursuits