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Stragetic management of mature industries

Recognizing that all living things go through a cycle of birth, growth, maturity, and death, the inspiration for the concepts of product life cycle and industry life cycle comes from biology. The life-cycle concept is an appropriate description of what happens to products and industries over time. When applied to organizations, the product life cycle and industry life cycle contain the four stages of introduction, growth, maturity, and decline. This concept is much more than an interesting analogy of business and biology.
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Defining a Mature Industry

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Competitive Dynamics

Porter's generic strategies describe how a company pursues competitive advantage across its chosen market scope. A company chooses to pursue one of two types of competitive advantage, either via lower costs than its competition or by differentiating itself along dimensions valued by customers to command a higher price. A company also chooses one of two types of scope, either focus offering its products to selected segments of the market or industry-wide, offering its product across many market segments. The generic strategy reflects the choices made regarding both the type of competitive advantage and the scope. The concept was described by Michael Porter in
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In the redeployment strategy, firms seek attractive opportunities in related industries, using acquisitions to fill any resource deficiencies. In the consolidation strategy, firms combine with their competitors within the same industry. The resulting larger pool of resources provides greater opportunities for disposing off their under-utilized resources through the market, while enhancing their profitability. Either way, excess resources can find new applications, within the firm in the former strategy and through the market in the latter.
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Essentially, companies have searched for new-business-level strategies that allow them to merge a fragmented industry in order to enjoy the potential profits possible in a consolidated industry. The challenge in every fragmented industry is to figure out the best set of strategies to overcome a fragmented market, so that their competitive advantages associated with pursuing one of the different business models, can be fully realized. During this stage of embryonic industries, investments needs are greater because a company hast to establish a competitive advantage.
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