Question

In: Operations Management

recognize the principal strategic characteristics of mature industries

recognize the principal strategic characteristics of mature industries

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Expert Solution

Principal strategic characteristics of mature industries

When the growth rate of an Industry reaches national economy growth rate, such industries can be classified as a matured Industry. An industry will be matured after enjoying the fruits and benefits of growth stage and they should strategically align with new characteristics in order to compete in the sector. The market growth rate will be reduced compared to the growth phase in the matured state.

Here we will discuss few Strategic characteristics of mature industries;

1- In a mature industry growth will be specific to each form or company. They can attract new customers and increase their revenue. Basically various firms inside the industry can capture or share the market share within themselves.

2- One major strategy which firms or companies adopt in a matured market is providing the services or product at a lower cost compared to the competitor in the industry. This will enable them to capture the market share in a matured industry and force other companies also to lower the cost.

3- Another strategy which is adopted by many firms in a matured market is improving customer relationship and create a set of loyal customer segments. As the industry is matured, the competitors in the industry will be providing almost similar kinds of service to the end user. So if the firms can identify the loyal customer and try to provide them best class service, they may be loyal to the company.

4- Innovations: As the industry is matured and if it is providing the expected service to the customer, addition of a new innovation or a ‘wow’ factor which the customer can look upon compared to other firms will always attract them to the firm which implements it and it can be competitive advantage.

5- Low investment opportunities: Investors will show hesitance to invest in such an industry and the investment opportunities are less compared to growing industry, which will lead to a stagnancy and low growth as expected.

6- Complete Information: In a matured Industry the customer has the access for perfect information. They know about price, quality, various product features and variety of services they can avail from all the firms.

7- Similar types of service and products: We can always observe a commonality in all the products or service provides in a matured market. The benefit of innovation or a new feature comes into picture at this stage to improve competitive advantage for the forms participating in the Industry

8- As the Industry is matured and all the information is available to all the stakeholders, the entry of a new company or firm is easy. Even though the growth rate is flat, the new entrant enter and compete in the industry with proper investment and promotions.

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