A specific example of how a company's life cycle is managed can be shown. Let's say we are talking about a certain company "X" that started selling baby products and opened a store in a small town for this purpose. At first, the assortment included only baby food. It sold well, and turnover quickly improved. There was virtually no competition: baby food in this town could only be bought in pharmacies or small departments of grocery stores (with a very modest selection). Therefore, the specialized store became popular.
Life Cycle Phase "Startup" Strategic objectives
Product and number of retail outlets for its sale
There is only one store, selling only baby food, but in a wide range
Management, personnel, management system
The founders of the business themselves decided all organizational issues; they hired 1-2 salespeople for the store.
Administrative structure diagram
The staff were not assigned strictly defined functional responsibilities
Financial situation
No additional money was allocated for advertising or expansion; the store gradually began to recoup the funds invested in the business.
Thus, this specific range and competently set prices together gave an excellent result. The store received its regular customers and a good sales volume. Now the business can be gradually expanded. The owners opened 4 more stores, where they began to sell children's clothing, shoes, toys and even large-sized goods. At this stage of the company's life cycle, baby food (where it all began) is no longer the main product and most of the profit is also not brought by this product. In addition, competing stores (specifically for baby food) appeared in the region, with a wide range of products and selling quite cheaply.
Life cycle phase "Growth" Strategic objectives
Product and number of retail outlets for its sale
Adding new product groups, opening new stores, focusing on the sale of children's goods.
Management, personnel, management system
Expanding the staff, defining a specific place of work (store) and a clear range of responsibilities for each seller. Introducing a motivation system. Strict accounting of balances. The owner himself is engaged in purchasing and distributing goods to retail outlets.
Administrative structure diagram
The organizational structure is quite clearly defined, each employee is subject to a specific job description, which lists the work to be performed and sets priorities.
Financial situation
The profits generated by the stores are enough to pay rent and salaries. There are funds for advertising campaigns, which will allow information about the product to be conveyed to a wider audience.
At the next stage ("Maturity"), sales volumes gradually decrease. The entire possible audience has already been covered, and there are more competitors. Large federal stores have opened, with a wide range of children's products and very attractive prices for consumers. The company stays afloat only due to loyal regular customers. It was necessary to launch a loyalty system and change the distribution of the assortment among stores. Now each outlet began to sell one specific type of children's goods.
As the business expands, the volume of purchases increases (and this is additional work for the manager), as a result, quite large inventory balances accumulate, which are also important to manage competently. It is difficult for the company owner to keep track of the inventory of goods in all retail outlets.
Life Cycle Phase "Maturity" Important tasks of the strategy
Product and number of retail outlets for its sale
In each district of the city the company has its own store with a wide range of any children's goods. The remains accumulate in waves, unevenly, so it was necessary to reconsider the approach to their management.
Management, personnel, management system
The staff has been expanded. The sellers are responsible for receiving and recording incoming goods. The management of inventory is carried out according to a specially developed system.
Administrative structure diagram
The staff was reorganized, the positions of senior and junior salesmen were introduced. The management of the business is in the hands of the founder.
Financial situation
The period of stagnation in sales was accompanied by additional expenses. As a result, income and profit became smaller.