Discuss the growth stage of the industry life cycle, and its impact on strategy

What will be an ideal response?

As industries enter periods of rapid growth, incumbent firms increase market share by taking advantage of
footholds established earlier. Rapid growth increases speed down the learning curve and presents leaders with an
opportunity to establish low-cost positions that are difficult to imitate, at least in the short term. During this phase,
however, technologies can change as new entrants learn from and improve on the work of early movers.
During the growth phase of an industry, firms make important decisions about how they intend to grow: they
determine the strategic vehicles that they'll use to implement their preferred strategies. High-tech companies, for
example, may seek alliances with established firms in adjacent industries, similar to the embryonic stage, in order
to fill in gaps in their own range of competencies. Such is the case in the biotechnology industry; virtually all of the
pure biotech companies have established alliances with large pharmaceutical companies in order to access
clinical-trial expertise and marketing capabilities. During the growth stage, too, firms with desirable resources
become attractive acquisition targets, both for incumbents wanting to grow rapidly and for firms in related
industries seeking to enter the market.