There are three major problems that come up in the Diamond Power case. According to research by Hitt, Ireland, and Hoskisson, firms establish a niche for dominance within an industry during this phase. The duration of the growth stage, as all the other stages, depends on the particular industry or product line under study.
Since the firm is small and has no established reputation, it must avoid direct confrontation with its more powerful competitors. This is typically depicted as an S-curve tracking sales over the life of the product, as shown in Figure 1.
This resulted in increased sales in both new equipment and parts. Marketing often refers to products at the growth stage as "stars.
The marketing organization will be more focused on monitoring competition and on pricing and promotion strategies in a highly competitive and defined market versus finding innovative new offerings or markets.
Lastly, companies alternate between innovative phases and conservative ones - between stages that establish or renew organizational competences and those that exploit them through efficiencies. In order to maintain control and direction of the firm, more formalized methods of information sharing are required as are cross-functional coordination activities.
The product development and delivery functions are likely minimal or non-existent. This is often accompanied by another, larger shake-out in the industry as competitors who did not leave during the maturity stage now exit the industry.
In the Growth stage, the firm seeks to build brand preference and increase market share. In order to support an innovation mindset across the organization, information availability and sharing must be enabled.
Long-term changes should include reopening service centers and possibly trying to break into the Canadian and foreign markets. Major improvements of old parts should be made and quickly patented in order to win back clients and protect future profits and market shares. Much like the Product Life Cycle, the strategies, objectives, organization, threats and opportunities of the firm vary significantly by stage and also affects the product development and delivery organizations.
Scameborn, follows the Diamond Power Specialty Company from its humble beginnings in to its decline in In other words, the niche strategy is often abandoned as broader markets are addressed. Strategy is still focused at the top of the hierarchy, with input from within the organization.
Also, Diamond did not take the opportunity to buy out the profitable Blalock low production company, a company making Diamond parts that were not patented. Earnings and accompanying assets will also grow and profits will be positive for the firms. Figure 2 - Organizational Life Cycle The stages are considered developmental in the life of the firm, much like a biological model, and are sequential, cumulative, imminent, not easily reversed, and involve a broad range of activities and structures.
However, for other products the growth stage may be longer due to frequent product upgrades and enhancements that forestall movement into maturity. Perhaps a new, unique product offering has been developed and patented, thus beginning a new industry.
From a product development and delivery perspective, roles within the organization become more differentiated, and there is a relative increase in the sizes of the marketing, sales and operations organizations versus development to generate and fulfill demand.
Thus the growth stage requires funds to launch a newly focused marketing campaign as well as funds for continued investment in property, plant, and equipment to facilitate the growth required by the market demands.
A firms strategic plan is likely to be greatly influenced by the stage in the life cycle at which the firm finds itself. Maturity Stage At Maturity, sales levels stabilize due to a high level of competitive activity and possibly due to market saturation.
Scameborn, follows the Diamond Power Specialty Company from its humble beginnings in to its decline in There may be some projects looking at potential future technologies and products, but they will tend to be underfunded and not prioritized as major initiatives. It seems that a division as valuable as the service and replacement division would have been protected more heavily.
Copes-Vulcan and Bayer Company.
Both of these decisions eventually caused severe problems for the company and helped to lead to its decline. The Growth stage officially begins to end as sales start to slow. Also, Diamond should try to raise the market shares of other divisions, such as foreign sales to back up its aftermarket support system so the company is not reliant on just one of its divisions.Managing the Transition from Maturity to Decline: Diamond Power Corporation This case study, prepared by Richard C.
Scameborn, follows the Diamond. An Introduction to Managing the Transition from Maturity to Decline: Diamond Power Corporation PAGES 3. WORDS 1, View Full Essay. More essays like this: diamond power corporation, richard c scameborn, the birth of diamond, diamond powers.
Not sure what I'd do without @Kibin. The Organizational Life Cycle illustrates 5 stages companies can go through as they grow.
The stages include Start-up, Growth, Maturity, Revival and Decline. Much like the Product Life Cycle, the strategies, objectives, organization, threats and opportunities of the firm vary significantly by stage and also affects the product development and.
Staff is in place to handle the areas that you no longer have the time to manage (nor should you be managing), and your business has now firmly established its presence within the industry.
good paper analyzing the life of a company - Managing the Transition from Maturity to Decline: Diamond Power Corporation. This case study, prepared by Richard C. Scameborn, follows the Diamond Power Specialty Company from its humble beginnings in to its decline in /5(2). The Five Stages of Small Business Growth.
a model of corporate evolution in which business organizations move through five phases of growth as they make the transition The corporation must.Download