This is fourth lecture of strategic marketing about industry analysis.

1. Industry Analysis
Session # 04 (Oct, 4th
, 2017)
Presented by:
Prof. Akhlas Ahmed
IHM – Dow University of Health Sciences

2. OVERVIEW
Session # 01 (Sept, 13th
, 2017)

3. Today’s topics:
Concept of product and its life cycles.
Concept of industry and its life cycles.
Characteristics of emerging/ developing industries.
Characteristics of maturing industries.
Revitalization of industry.
Space analysis.
Session # 01 (Sept, 13th
, 2017)

4. Session # 01 (Sept, 13th
, 2017)
 The concept of product:
A tangible product that satisfy wants or needs of the customer e.g.
Car or Motorcycle etc.
 The concept of industry:
Industries are collections of organizations with common products
and technologies. It is a very precise commercial enterprise
that manufacture heavy goods from raw materials e.g. Vehicle
maker or Motorcycle maker.

5. Session # 01 (Sept, 13th
, 2017)
Product Life Cycle:
1.Introductory stage
2.Growth stage
3.Maturity stage
4.Decline stage
The product life cycle is based on notion that technologies have life
cycle and that it was the technologies incorporated in products that
give the latter life cycle.

6. Industry Life Cycles
Session # 01 (Sept, 13th
, 2017)
Since industries are about products and technologies.
Therefore, it also have life cycle.

7. Session # 01 (Sept, 13th
, 2017)
Industry Life Cycle:
The industry undergoes various stages throughout its life span. The industry life
cycle is divided into five stages which are as follows…
1.Development stage: In this stage the boundaries and range are set and the
product development and designing are into inclining phase.
2.Introduction stage: It is the introduction stage for the process innovation for
the industry and designing of the product starts.
3.Growth stage: It is the growing phase in terms of process innovation and
product development. The industry is so developed that new player find it so
difficult to enter and small player finds difficulty in surviving.
4.Maturity stage: The industry is relatively stable in terms of growth rate and
no new innovation and development happens in this stage. The products are at
their stage of utilization and no further scope is left to increase the profit.
5.Decline stage: At this stage profit starts declining therefore to maintaining the
efficiency in terms of process and product development is not possible.
There are two other relevant aspects of an industry are…
The amount of hostility that exists in an industry.
The amount of fragmentation that has taken place.
In both cases we will relate this to strategy.

8. Analysis of Emerging and
Developing Industries
Emerging industries are either newly formed or
reformed industries that have been produced
by technological innovations, shifts in cost
relationships, emergence of new consumer
needs, or other economic and sociological
changes that make a new product or service a
potentially viable business opportunity
(Porter, 1980a).
Session # 01 (Sept, 13th
, 2017)

9. Characteristics of Emerging Industries:
 Uncertainty exists about the technology and the
strategic approaches adopted by industry participants.
 There is little or poor information about competitors,
their customers and what is happening in the industry
and reliable industry sales and market share data are
often unavailable.
 The initial small production volume and lack of
experience with the product often combine to produce
high costs relative to those the industry can potentially
achieve.
 From the customer’s point of view, changeover costs
from what they currently use can be expensive.
Session # 01 (Sept, 13th
, 2017)

10. Characteristics of Maturing Industries:
 Rational growth in sales require more market share.
 Decline in industrial growth rate.
 Active competitions may need change in strategy, level of
services with cost control.
 Vital promotional activity leads towards price cutting
with additional services.
 Focus on customers may clues towards brand
consciousness.
 Over-capacity in production may goes into maturity
stage.
 New product identification could be more risky and
costly.
 Global market potential encourage manufacturers to enter
in new market.
Session # 01 (Sept, 13th
, 2017)

11. Revitalization of Industry
 New markets
 New products
 New applications
 Revitalized marketing
 Government assisted growth
 Exploitation of growth sub markets.
Session # 01 (Sept, 13th
, 2017)

12. SPACE ANALYSIS (Strategic Position and Action Evaluation): Rowe et al., 1989
Company dimensions Industry dimensions
 Financial strengths Environmental stability
 Return on investment Technological changes
 Leverage Rate of inflation
 Liquidity Demand variability
 Capital required/available Price range of competing products
 Cash flow Entry barriers
 Exit barriers Competitive pressure
 Risk Price elasticity of demand
 Competitive advantage Industry strength
 Market share Growth potential
 Product quality Profit potential
 Product life cycle Financial stability
 Product replacement cycle Technological know-how
 Customer loyalty Resource utilization
 Competition’s capacity utilization Capital intensity
 Technological know-how Market entry ability
 Vertical integration Productivity
Session # 01 (Sept, 13th
, 2017)

13. Session # 01 (Sept, 13th
, 2017)
SPACE ANALYSIS

14. Q/A Session