Characteristics of the entrepreneurial stage of the business life cycle

Characteristics of the four stages of the enterprise life cycle:

1, start-up:

Small scale of production, low market share of the product, fixed costs, the enterprise's organizational structure is simple, the production operator and manager into one, low profitability, cash flow is not smooth. Frequent financial difficulties.

2, the growth period:

Basically formed their own unique product line, product market share steadily increased, market competitiveness gradually increased, performance growth rate accelerated.

3, maturity:

Enterprises with strong capital, advanced technology, rich human resources, improved management level, with strong viability and competitiveness, the enterprise can effectively carry out the coordination of day-to-day business processes and the effective allocation of resources.

4, the decline period:

Enterprise product market share gradually declining, the failure of the new product trial, or has not been fully accepted by the market, the management and the department of the problems between.

The overall strategy of a company is divided into the following three types: developmental, stabilization and austerity.

Developmental strategy

(a) Developmental strategy, also known as offensive strategy. Make the enterprise in the strategic base level to a higher level of goal development, the strategy is appropriate to choose in the enterprise life cycle change stage of the rise and peak, the time is 6 years.

Stabilization strategy

(ii) Stabilization strategy, also known as defensive strategy. So that the enterprise in the strategic period desired to achieve the business situation is basically maintained in the scope and level of the strategic starting point. It is appropriate to choose to implement the strategy in the stable period of the change phase of the enterprise life cycle for three years.

Tightening strategy

(c) tightening strategy, also known as retreat strategy. It refers to the enterprise from the strategic base level backward contraction and retreat, and deviation from the strategic starting point of the strategy. Adopt austerity strategy is appropriate to choose in the enterprise life cycle change stage of the downturn, the time for three years.