Common life cycle phases for all businesses are known to everyone. They normally start with;
Quantum growth in demand for
the product or services, high volume of sales out, less marketing cost, easy
money and profitability.
High volume of business with high
sales and marketing cost, Profitability is almost maintained.
Volume of products and services
start declining, moderate profitability, volatile market conditions, very high sales
and marketing cost.
♦ End of consolidation phase:
Very few big players (companies) and specialty product / service organizations will survive in market, profitability will shift from high volume sales out of products / services in to low volume sales out of high-end products and services and replacement market will open up. Crucial survival issues will crop up for small and medium size companies. Merger and acquisition will increase.
is that in India, most of the business owners of small and medium size enterprises
(SME) have their success parameters traditionally based on their own early
retirement or on how much amount they will get when they sell their business. There
is third factor which is “appreciated value of the business premises”. So when
consolidation phase is started, they become confused about where your
business is going, start becoming directionless and start feeling exhausted with the
unproductive work load.
Decision to scale
up or scale down their business solely depends on their own capability for embracing
the risk, learning from past mistakes, energy and interest.
January 21, 2013