Slow Cycle Market
Definition of slow-cycle market and other cycle markets
A slow-cycle market is a market in which the resources are very shielded and a company maintains monopoly over the market such that competitive pressures are unable to penetrate the market. In today’s world this type of cycle market is rare as compared to the standard-cycle markets and fast-cycle markets.
In standard-cycle markets there may be many competitors serving a large clientele and this requires companies to create a niche for themselves and meet the client’s demanding needs in order to remain competitive. This is evident in the automobile markets where there are several companies that compete for the attention and retention of a huge market.
Fast cycle markets are highly competitive and companies must constantly innovate new products as well as counter attack the strategies of their competitors in order to survive. This type of market is very fast and a company cannot rely on singular resources. Clients’ demands are also constantly changing and companies that want to thrive must go out of their way to identify gaps and new trends in order to incorporate these in their products or services.
How slow-cycle markets work
Basically, slow markets work where an investor ventures into an absolutely untapped market which requires high amounts of capital and levels of innovation to survive. The slow-cycle markets often monopolize the market by designing top notch products that are difficult to imitate. The key to surviving in a slow cycle market is ensuring that products provided are not imitable.
Slow-cycle markets also receive some level of protection from the governments. This is because of the uniqueness of the products they create and high economies of scale the companies offer in the particular market. Additionally, slow-cycle markets serve the needs of few yet high class clients. Products generated from this market are usually of high quality and only high-end clients can afford to spend on them.
As a result, companies that produce these products constantly reinvent themselves and are very secretive about their products. These companies also capitalize on their monopoly and make extreme profits during the initial years. Slow-cycle markets can maintain monopoly of a market for a very long time before other investors can penetrate it.
Merits and demerits of slow-cycle markets
The slow-cycle markets have both advantages and disadvantages. The merits of these markets include:
- They produce very unique and high quality products that can be sold both locally and internationally. Companies that thrive in these markets often gain massive profits from their monopolization of the markets.
- They retain high economies of scale such that even latter entrants into the market have a high standard to meet hence offering consumers high quality products.
On the other hand, the slow-cycle markets can have its share of disadvantages including:
- They are capital intensive businesses and this can lock out many potential entrepreneurs
- They encourage monopoly and kill competition which is bad for business
- They are expensive to run and require highly skilled workers to create the unique and inimitable products.
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