Strategy Formulation in Declining Industries

Abstract

Because the environments of declining industries differ, many different strategies could be appropriate for coping with declining demand. Demand and customer traits, product traits, supplier behavior, competitor traits, and exit barriers must be taken into account by a firm in a declining industry. Strategy alternatives include early exit, milking the company's investment, shrinking selectively, holding the present position, and increasing investments. Some possible strategies must be adopted early if they are to succeed.