Table of Contents
Part A1 - Industry Life Cycle Framework - Overview 2
1.0) Introduction 2
2.0) Industry Life Cycle Framework 3
2.1) Introduction 3
2.2) Growth 4
2.3) Maturity 4
2.4) Decline 5
3.0) Critique 5
Part B - Industry Level Analysis 6
1.0) Porter’s Five Forces Model 6
2.0) PEST (Political, Economic, Social, Technological) 9
2.1) Political 9
2.2) Economic 10
2.3) Social 10
2.4) Technological 11
References 12
Part A1 - Industry Life Cycle Framework - Overview
1.0) Introduction
Every living thing has a life cycle, which includes an industry as well. The industry life cycle is similar to human life cycle which consists of four phases: introduction, growth, maturity, and decline (Grant, 2010). These stages will be described in detailed in the next section of the report. The industry life cycle is different from product life cycle as within an industry, there are frequent updates of products. However, certain industries may contract sharply and disappear faster than others. For example: the replacement of video shop rentals by digital videos. Industries evolve over time in terms of the structure and overall size. Industry life cycle can be measured by total industry sales and the growth in total industry sales. The model of the industry life cycle is shown in Figure 1. The curved line shows the total output of a typical industry changes over time.
Figure 1: The Industry Life Cycle
2.0) Industry Life Cycle Framework
This section presents the understanding of the life-cycle of an airline industry where it had been positioned as cyclical and this had caused impacts on growth rates. That being said, the trend does portray that it has a consistent growth in demand. Airline industry is one of the most competitive and growing industries in the world as it leads to economic growth, world trade, international investment and tourism. In the last decade, it has grown strongly by 7% per year for both business and leisure...