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In this sense, " stages" in one company's lifespan may include the following:
1.Birth (or Startup) stage 5.Decline stage
6.Demise stage or change into a
or
2.Initial Growth stage
Change into a different company
3.Expansion stage (e.g., through merger or acquisition)
4.Maturity stage
The four life cycle stages are:
● Introduction
● Growth
● Maturity
● Decline
The economic business cycle (first meaning) can impact
stages of the company business cycle (second
meaning). Birth and Growth stages tend to accelerate
during economic recovery and expansion, of course.
Company Decline and Demise occur faster during
economic recession and depression.
THIRD MEANING:
BUSINESS CYCLE FOR AN ONGOING
COMPANY
The third meaning for business cycle also refers to a
repeating series of phases in the life of an ongoing
business. Here, however, the sequence does not picture the
birth, growth, and demise of a company. Instead, the third
meaning describes a repeating series of adjustments a
company makes to its business model and strategies. The
series may cover a year or several years, and then repeat
many times during the company's life.
Note especially that a business cycle in this
sense might include stages such as these:
● Firstly, the company takes in revenues from
ordinary operations for a year or more.
● Secondly, leaders and analysts re-evaluate company
business performance and growth prospects. For
this, they give particular attention to evaluating:
○ Company business model performance. Here,
they will focus mainly on their pricing and
margin models.
○ Competitive strategy effectiveness.
○ Marketing strategy effectiveness.
● Thirdly, leaders adjust or change the
business model and strategies.
○ Successful strategies and models
undergo fine-tuning.
○ The company replaces failing strategies
and models.
● Finally, company resumes business for
another period before re-evaluating.
DEFINING BUSINESS CYCLE PHASES:
RECESSION, DEPRESSION, RECOVERY AND EXPANSION
The primary meaning of business cycle and economic
cycle refers to changes in economic activity within a
country or countries. Because these two terms are
names for the same sequence, they are interchangeable.
Economists define the cycle by referring to economic
output, which they measure as the country's
gross domestic product (GDP).
Note that GDP is just the market value of all goods and
services produced within the country during a year. And,
when multi-national companies produce in other countries,
that activity is not part of home country GDP.
The stock market cycle typically runs more or less
parallel to the business cycle, but ahead of the business
cycle. Some analysts, therefore, see the stock market
cycle as a leading indicator of future business cycle
phases.
Note that stock market prices usually rise or fall ahead of
like changes in the economy (GDP).
Profit Negative