How strategic business life cycle planning keeps your business outstanding against competition and maintain growth

Every business goes through a life cycle from inception to demise. The only difference is how long will the entire life cycle be? This differs from companies, nature of the business and the industry it operates in. This is because within the life cycle there are also several stages that a business progresses through; Startup, Growth, Maturity, Decline and finally Exit.

When manage well your business can remain to be outstanding against your competitors and maintain growth.

For each of the 5 stages there is a need to understand its characteristics and develop strategies that can be adopted to harness its market position.

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1.?????? Startup – This is the beginning stage of a business. It is new in the marketplace and many internal operational matters may not be fully developed and aligned yet. At this stage since it is new to the market place, a lot of efforts are needed to promote and make known your products and services. Normally at this point in time sales will be low until customers get to know your brand, products and services. Operational cost also tends to be on a higher side as you have not found many ways to leverage it yet. Hence together this may mean low or no profit and this may go on for a while until things pick up.

The top focus at this stage would be coming up with growth strategies. This would be a key focus with the right and talented team. Developing growth strategies must be of top priority here and all hands on deck to achieve financial breakeven as soon as possible.?

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2.????? Growth – when your business start to operate at this stage this mean your products and services have created a significant public awareness and customers’ loyalty. You will begin to see certain level of economies of scale with increasing sales volume. With that your business should enjoy rising profitability assuming you also have proper cost management. At this point your business will also be noticed by competitors and begins to attract competition.

Here you need to look into price and/or product differentiation strategies. This allows you to fend off competitors and build certain strategic fences around your market share.

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3.????? Maturity – as your business continues to move forward it will reach certain level of maturity. Here there will be certain amount of market saturation with high competition assuming this is an attractive market place. With competition, slower growth in your business will take place. In fact there may even be products or services subsitution. All these will cause falling prices and as your business reach maturity your cost structure would also be in a quite steady state therefore pushing down profitability.

The key strategy over here would be to roll out strategies that would maintain market share. This becomes highly necessary as your market share is quickly being eroded. One way is to rejuvenate your business life cycle is with new products or services features while perhaps retiring some and offering them before it heads towards a sharpe decline.

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4.????? Decline – at this stage several key characteristics begins to emerge very clearly ranging from sales volume which initially stabilizes will now begin to decline with falling demand. Such scenario will diminish prices and profitability very quickly. Cost being a clear burden at this point will need to be dealt with quickly as it is no longer optimal nor sustainable.

If nothing was plan earlier on rejuvenating the life cycle at this point your business should strategize some kind of consolidation with others or engage in corporate turnaround efforts or exit the business all together.

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5.????? Exit – this will be the last and final stage of the business life cycle. Towards this end what remains to be done is to close off all the financial and regulatory ends with various stakeholders like landlord, creditors, banks, employees, business registrar, liquidators, manpower department and unions.?

At this stage the strategies are to make sure all regulatory requirements are complied with, good business practice are adopted with all your stakeholders who have journeyed with your business and maintain a good reputation as much as possible.?

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As your business goes through the life cycle it should not be taken as just a natural progression from one stage to another and it is what it is. Rather a business life cycle should be managed in a strategic manner. This is because at every stage the business characteristics changes and there are different strategies that should be adopted to make a success at each stage.

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