What is the industry life cycle, why is it useful and what does it consist of?

The industry lifecycle looks at the stages in the lifecycle of an industry. It is useful as strategy is shaped by the stage in the industry life cycle. Hence, it influences strategy and strategic decision making. The industry life cycle consist of 5 phases: 1. Development (Low rivalry, high differentiation, innovation is key) 2. Growth (Low rivalry, high growth and weak buyers, low entry barriers, growth ability is key) 3. Shake-out (Increasing rivalry, slower growth, some firms exit, managerial and financial strength is key) 4. Maturity (Stronger buyers, low growth, standard products, higher barriers of entry, market share and cost is key) 5. Decline (Extreme rivalry, typically many exits, price competition, cost and commitment key)