Nothing lasts forever - and the same applies to the market.
They are remarkable, from time to time, the changes happening in the market and people's consumption habits. We realize that evolution happens inevitably, and it symbolizes the end of certain life cycle of the market.
Companies need to be attentive to the great events that influence the market curve - issues such as politics, consumer habits and mentality of the population of a given generation are crucial to trace good working strategies in the market.
The life cycle consists of four steps well defined: launch, growth, maturity and decline.
The launch phase is characterized by the acquisition of new skills, achievement and development of differentiated technologies or other things that are able to transform the way of thinking of the market.
A major example of this, for example, are the LED televisions. Little was mentioned of such technology. Suddenly, the market began to improve electronic and transform the way consumers think, showing the real benefits of this type of technology.
Companies that can improve their production and rapidly improve each of these new skills and technologies have gained considerable competitive advantages over their competitors.
Investments in this phase are needed, then the profitability in this period tends to be low - but everything is compensated when the actual results start to appear.
Growth is the second phase. Of course, with the emergence of a new technology or competence, the market begins to demand that new type of product.
In this case, one must be prepared for the demands of the market.
Let's think of the example of LED TVs mentioned above: at first, few people understand the real benefit of this type of product.
However, as the market was being educated about the advantages of this investment has been growing demand for products like this, considerably increasing the number of consumers and companies that work with this type of technology.
At the time of maturity, the market is already uniform in relation to technology or competence concerned. The competition is already stabilized, and the population has consumed this product at the time of "fever."
At this point of the curve, the technology is already stagnant, losing its attractiveness, companies had to adapt to this demand have done their part, and everything is fixed at the time (probably at this moment, somewhere in the world someone is studying another way to improve the products - and the cycle starts again).
4. The decline
When the technology reaches maturity and loses attraction for the performance of public competition and excitement, begins decline.
Usually at this stage we can see a considerable change in the evolution line before invested by competitors.
Many companies give up this market and go in search of new technologies and skills to launch another trend - and thus starts up a new cycle.
life cycle of the product or service
It is also necessary to consider that the products and services also have a specific life cycle, based on the growth or decline in the consumer market for that type of goods.
All products developed by the market appeared to solve a problem or take advantage of opportunities that were going unnoticed in the market.
The same logic of the market life cycle applies here: a new demand is noted; companies strive to create the best products and services to ensure that the public buy that product; It happens a real noise in the market, where people seek desperately to find that the product in question - all are buying; market stagnates and the product begins to get out of line due to the emergence of a new technology.
Understand the market life cycle