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In assessing the competitors and the market, there in the study guide is :Assess the contribution of the lifecycle model,
the cycle of competition and associated costing
implications to understanding competitive
behaviour.3. in A3.What could be the cycle of competition and associated costing implications to understanding competitive behaviour?
Regards
NirajHmm…
As far as I think Life Cycle of any product consist of this way:
1. Introductory phase – In this phase depending on region and market conditions you charge prices like I quote example of real life nvidia company which follow price skimming means charging high in early phase so similarly here organisation tries to achieve either maximum market share or maximum profit.
2. Growth – In this phase, no matter how much competition will be, everyone will earn some bucks.. It is situation where everyone is earning but to survive next phases, you should try to achieve maximum market share and do appropriate reinvestment for this objective.
3. Maturity – Here growth of a product stagnate and only possible way to survive this phase is through market share and you have to do cost cutting decision either compromising profit margins or down sizing. Later maturity already annihilate small competitors for your company.
4. Decline – Here your product can no longer be beneficial either because of rapid technology change or trend change or might be other reasons. Only way to go through is what you earned from this product used for another product which is in its introductory phase. Competition here if any will be on market share basis.This is what all I can say…
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