Sample Business Plan Paper on the Life Cycle of the Automobile Industry in the United States

In the modern days, the industry has many players but that was not the case when it was new. In the introduction stage, new cars had to be developed to attract the attention of the market.  The early adopters were the first people to purchase automobiles and their input into the industry led to the development of the cycle to the growth stage. The shift from the introduction stage was as a result of the rapid innovation such as the invention of a combustion engine. The competition in this stage was not high as the number of firms involved was few. The growth phase was characterized by increased knowledge of the customers about the automobiles. The standardization of the automobiles led to the increase of economies of scale and the profits thus increasing the level of competition in the industry due to an increase in the number of firms. The industry experienced this stage in the early 1920s with smaller firms forced to exit the market. The main focus in the industry was to produce automobiles in the least cost possible so that the products would be affordable to the clients. This led to the further exit of firms from the industry, as they could not keep up with the competition.

The efficiency in the industry led to the shift from the growth to the maturity phase. The already existing customers purchase the products in this phase and there is a low rate of innovation. Companies use brand differentiation to make their products sell and they mainly concentrate on improving the existing models. The industry has not yet reached the decline stage and it is unlikely to get there soon because automobiles are still the cars are still the most affordable means of transportation.