Competitive life cycle of a market Literature & Language Coursework (Coursework Sample)
look at at competitive cycle and moat considerations in relation to salesforce.com
source..Competitive life cycle
Introduction
A company just like human beings passes through various stages of life. When the company is new to the market, the profit is usually negative because a lot of capital has been invested in the company. Any profit realized should be ploughed back to the company to solidify its position and help in funding its growth. Market demand at this point is very low and more capital is required to carry out product differentiation.
At the growth stage, more significant capital is needed to differentiate the product of the firm with that of the other competitors. This can be done through launching new marketing campaign and continued investment in the property and equipment. This will help in meeting the market demand. Sometimes businesses start experiencing economies of scale at this stage which facilitates development. More researches and development are needed at level to make changes on product or service. This is to ensure that the product or service reflects customer’s needs.
After the introduction and growth stage, there is maturity stages of a company. Here, the primary focus of a company is to maintain their share market. This stage is characterized by decrease in market share and reduction in profit. A part from maturity stage, there is declining stage which is the last competitive cycle of a business. The main feature of this market is declining market shares, reduced profits and sometimes withdrawals of some products. There is no doubt that companies can still make profit in this stage. In both growth stage and declining stage, the company faces stiff competition as there are new entrants in the markets.
As evident from the above discussions, Salesforce.com is in growth stage of competitive cycle. The table below shows the market share in 2015 and 2016.
4493059257810Low 00Low 3416968259882High 00High
Fiscal year ending January 31, 2016
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $74.65 $57.28
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $75.71 $69.16
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $78.77 $65.17
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