What does sunset industry mean?

Sunset industry refers to the industry in which the total sales volume of products drops absolutely or the growth slows down regularly during the duration. This is the image name of the declining traditional industrial sector.

The basic feature of sunset industry is that the demand growth slows down or stagnates, and the industrial output is lower than the average level of all industries, showing a downward trend. Sunset industry is related to product life cycle. Some products have mature technology, continuous innovation tends to be exhausted, the market is saturated, products tend to be homogeneous, competition is fierce, and profits are very low.

A typical example is a video recorder. For example, the film industry should be a sunset industry. Due to the popularity of digital cameras, fewer and fewer people use film. Because the basic characteristics of industrial recession are declining demand, overcapacity and excessive competition, only low-cost enterprises can survive in the market with shrinking demand. In this context, the management strategy of integration, diversification, scale and scope came into being.

Extended data?

First, the specific performance

1, supply and demand. The price elasticity of sunset industry's products is small, overcapacity and insufficient demand can't meet the optimal pricing rules for enterprises to maximize profits-the price is less than marginal cost or even average cost, which leads to vicious competition.

2. Industrial organizations. In the stage of industrial recession, all links in the industrial chain should be from the internal division of labor in the industrial growth period and maturity period to the social division of labor, and the social division of labor will be transformed into the division of labor in enterprises, thus the industrial organization will be vertically integrated.

3. The role of the national economy. Sunset industries are mostly traditional industries, the proportion of its output value to GDP is declining, and the product market is shrinking.

Second, the reason.

1. Technological substitution is the most common cause of industrial decline. Technological innovation will make new products with excellent performance and low price replace old products. A particularly significant technological revolution will also create a large number of emerging industries to replace traditional industries. Emerging industries, such as electronics and communications, have made or are making many traditional industries withdraw from the historical stage.

2. The change of demand is another main reason of industrial decline. The development of production and social progress. Constantly changing people's lifestyles and consumption patterns, causing changes in consumption preferences. Such as emerging tourism economy, holiday economy and leisure economy. For example, the green movement is popular all over the world, and the green industry is thriving. So as to reduce the demand of industries that do not meet modern hygiene standards and are heavily polluted.

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