CONTEMPORARY STRATEGY ANALYSIS ( 7th edition, John Wiley & Sons Ltd., 2010 ) Robert M. Grant Chapter 11 Industry Evolution and Strategic Change © 2010 Robert M. Grant www.contemporarystrategyanalysis.com 1 The industry life cycle Structure, competition, and success factors over the life cycle. Organizational adaptation and change OUTLINE Industry Evolution 2 © 2010 Robert M. Grant www.contemporarystrategyanalysis.com Drivers of industry evolution : demand growth creation and diffusion of knowledge Introduction Industry Sales Time 3 The Industry Life Cycle Growth Decline Maturity © 2010 Robert M. Grant www.contemporarystrategyanalysis.com Time Rate of innovation Product Innovation Process Innovation Product and Process Innovation Over Time 4 © 2010 Robert M. Grant www.contemporarystrategyanalysis.com Technology-intensive industries (e.g. pharmaceuticals, semiconductors, computers) may retain features of emerging industries. Other industries (especially those providing basic necessities, e.g. food processing, construction, apparel) reach maturity, but not decline. Industries may experience life cycle regeneration, e.g. motorcycles, TVs: Sales Sales 1900 50 90 07 1930 50 70 90 00 10 MOTORCYCLES TV’s Life cycle model can help us to anticipate industry evolution — but dangerous to assume any common, pre-determined pattern of industry development Color B&W Portable HDTV Flat screen 5 How typical is the Life Cycle Pattern? © 2010 Robert M. Grant www.contemporarystrategyanalysis.com 1880s 1920s 1960s 1980s 2000 Mail order, catalogue retailing e.g. Sears Roebuck Chain Stores e.g. A&P Discount Stores e.g. K-Mart Wal-Mart “Category Killers” e.g. Toys-R-Us, Home Depot Internet Retailers e.g. Amazon; Peapod Warehouse Clubs e.g. Price Club Sam’s Club Innovation & Renewal over the Industry Life Cycle:…