Question

What are: Strategies in Embryonic and Growth Industries?

Answer 1

Embryonic and Growth Industries:

Embryonic industry is the type of industry which is just trying to develop and is in its first phase of its industrial growth lifecycle. The growth rate of this type of industry is very low and whose products are not so familiar to the customers. As the economies of scale cannot be achieved by these industries, the prices of the products produced by these companies would be very high.

Growth industry is the type of industry whose goods has a very demand in the market and sale of the company's goods will be very high and new consumers will tend to enter the market thus causing an increase in the market share of the company.

Strategies used by the Embryonic and Growth Industries

Embryonic industries :The life cycle stages of any industry is the same for all the firms in the same industry. In fact every firm will experience the stages of the industry life cycle differently. A firm's plans or strategies will depend on the stage in the life cycle in which the firm finds itself. Some firms may place itself in the introduction stage or the embryonic stage. In this stage, the firm may be alone in the market . The firm may use a focussed strategy to stress the uniqueness or the importance of its product or service to new or small group of customers in the market. These customers are known as the "innovators" and "early adopters" in the market. These firms establish a certain strategy to present wearly perceptions of the product quality, technological superiority etc., As the Embryonic industries spends money to create a new product offering, develop and test the prototypes of the productand market them, the firm's or the industry's profits would be normally negative at this stage during this life cycle of the industry.

Growth Industry : The growth stage of an industry also requires a significant amount of capital alike the introduction or the embryonic stage. At this stage, the firm will adopt a strategy to differentiate the firm's offerings from those of the other similar products in the market. Thus the firm in the growth stage requires funds to launch an advertising or a marketing campaign as well as to bring in funds required for investment in property, plant and the equipment to facilitate the continuity of the business in the industry in order to facilitate the growth as required to meet the market demands. Research and Development funds will be required to make effective changes to the products or services to meet the needs and suggestions of the customers in the market.If the firm is successful in this stage with its strategies, then the growing demand for the product will create a growth in sales.Earnings and the accompanying assets will also tend to grow and the profit position will turn out to be positive for the firms.