Explain some of the features of the introduction stage of the industry life cycle.

Question

What will be an ideal response?

Answer 1

When an individual inventor or company launches a successful innovation, a new industry may emerge. In this introductory stage, the innovator's core competency is R&D, which is necessary to creating a new product category that will attract customers. This is a capital-intensive process, in which the innovator is investing in designing a unique product, trying new ideas to attract customers, and producing small quantities-all of which contribute to a high price when the product is launched. The initial market size is very small, and growth is slow. In this introductory stage, when barriers to entry tend to be high, generally only a few firms are active in the market. In their competitive struggle for market share, they emphasize unique product features and performance rather than price.