Unit 3 - Business (Maturity Phase) Flashcards
(26 cards)
what is the maturity phase?
- one of the final stages of the business life cycle
- occurs after consistent expansion and/or growth
- the longest stage of the business lifecycle
- profits should be high and stable
- dominating presence
what are the typical characteristics of the maturity phase?
- sales = peak sales
- costs = low cost per customer
- profits = high profits
- customers = majority of the target market is attracted
- competitors = increasing
what are the typical challenges within the maturity phase?
- macro environmental factors (e.g changes in economy, society & market conditions)
- emerging technologies and innovations
- increasing competition
- expanding into new markets or expanding/innovating upon a product/service
what are some stratergies used to help in the maturity phase?
- expand into new markets
- expand/innovate upon products/services
- price match or beat competitors
- promote the brand’s USP
- cut operational costs
why is strategic planning important, especially in the maturity phase?
strategic planning is essential for a mature business as it allows it to continue to grow and to meet their objectives. it usually takes into account long term objectives for the business ranging anywhere between 2 to 5 years.
what are some typical objectives for a mature business?
- avoid entering a state of decline
- increase market share
- enter new markets
- acquire new sales and customers
what is the Ansodd Matrix Tool?
it is used during strategic planning to consider the man four growth stratergies
what are the four growth stratergies?
- market development
- market penetration
- diversification
- product development
what is market development?
putting an existing product/service into a new market
what is market penetration?
expanding sales of exisiting products/services in its existing market
what is diversification?
putting a new product/service into a new market
what is product development?
putting a new product/service into an existing market
what is vertical growth?
when a business focuses on expanding upon existing markets, customers, products/services as well as present or short term objectives
what is horizontal growth?
when a business focuses on new or emerging markets, customers, products/services as well as long term or future objectives
what is a niche market?
a small market that meets the needs and wants of a small demographic with a unique/specific set of characteristics
why would a business enter/establish a niche market?
- reduced competition
- easier to focus/monitor behaviours in market and objectives
why is innovation important within the maturity phase?
as the environment around mature business increases in competitors, innovation is important to stay competitive in the market
what is innovation?
innovation is the process of creating value through products/services that form a new solution to a consumers wants or needs
what is product innovation?
a product/service that is new or has been significantly improved
what is process innovation?
a new or significantly improved way of production or delivery
what is market innovation?
a new way to promote a product/service through product design, product placement, product advertising or pricing
what is organisational innovation?
a new way to organise business practices, workplace set ups and external relations
what is research and development (R&D)?
when a business does research in order to develop new technology or improve existing technology
why is research and development important for mature businesses?
it help businesses find new ways to improve or invent new technologies to gain a competitive edge
