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Determining which stage of the business life cycle? (1 Viewer)

J280

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How would I determine whether a business is in either the establishment/growth/maturity/post-maturity stage given stimulus material?
e.g.
A restaurant owner is finding that his business is running smoothly. He has well established procedures and processes. He finds that he needs to spend little on marketing because his business has a good profile in the local community.

Would this be in the Growth or Maturity stage? I'm thinking growth but.... ?_?
thanks for any clarification :)
 

Smile12345

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How would I determine whether a business is in either the establishment/growth/maturity/post-maturity stage given stimulus material?
e.g.
A restaurant owner is finding that his business is running smoothly. He has well established procedures and processes. He finds that he needs to spend little on marketing because his business has a good profile in the local community.

Would this be in the Growth or Maturity stage? I'm thinking growth but.... ?_?
thanks for any clarification :)
I'd say Growth... :) Have you got the tables with the features of each stage???
 

Smile12345

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Alright thanks, and yes I do but it got kinda confusing for me there haha :p
NP... Quite understandable... It can get confusing... And hard to determine between two stages ... :)
 

bongoli

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Establishment: Low sales and negative profit, = bad
Growth: Experiencing higher amounts of sales, new products being introduced, generally pretty high revenue
Maturity: Established customer base and thriving business however less rapid customers than growth stage..
Post-maturity: This branches off into both decline/renewal/steady state. Decline means that the business is failing to create revenue which may lead to involuntary cessation ---> liquidation of assets blah blah. Renewal means the business tries something different and tries to get an increase in their sales and steady state means no increase in sales no decrease..

In this case scenario, you're right it has many similar characteristics, but this one is definitely Maturity. Here's why; in the growth period, the business would be experiencing absolute rapid increases in customer bases with new customers and a significant amount of marketing is still required to maintain this. However in this case scenario, the characteristics moreover represent maturity purely because their (procedures, profile and customer base) are already established and they are experiencing a smooth management. Also note how it says very little marketing is required, an indicator that the customers ALREADY know about the restaurant business thus referring to the fact that it is in it's maturity phase.

A tip to answering these questions, is just to read all parts of the question and make sure you fully understand each of the business life cycle stages. This will enable to recognise the characteristics of each and identify regardless of any curveball scenario. Hope that answers your question :)
 

Smooth Operator

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I would say maturity - " He finds that he needs to spend little on marketing because his business has a good profile in the local community".
 

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