fbpixel Concept 75: Industry Life-Cycle Model | IFT World
101 Concepts for the Level I Exam

Concept 75: Industry Life-Cycle Model

The following diagram shows an industry life cycle model.



  • Slow growth.
  • High prices.
  • Requires significant investment.
  • High risk.


  • Rapidly increasing demand.
  • Profitability improves.
  • Prices fall.
  • Competition is low.


  • Growth starts slowing down.
  • Competition is intense.
  • Profitability declines.


  • Little or no growth.
  • Industry consolidates.
  • Barriers to entry are high.


  • Growth is negative.
  • Excess capacity.
  • High competition.

Limitations of the life cycle model include:

  • Some stages may be longer or shorter than expected due to technological changes, government regulations, societal changes or demographics.
  • It is less practical for analyzing industries going through rapid changes.

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