Company life cycle: a succession of changes over time

Like living organisms, companies go through different stages: birth, growth, maturity and disappearance. However, companies have the capacity to be reborn and to live several lives. These different phases are part of a company's life cycle, and are essential to know in order to deploy a long-term strategic vision.

The 6 stages of the corporate life cycle

Discover the 6 known, predictable and inescapable stages that a company goes through in the course of its existence.

1. The creation

Creation corresponds to the definition of the business model during a company's life cycle. This theoretical embryonic stage precedes the application of concrete measures relating to its administrative incorporation. It is at this point that the company benefits from a tangible status, materializing its birth on the market.

At this stage, the company is not yet generating sales, but laying the foundations and defining the vision that will guide it throughout its life. This gestation period generally lasts two years, before the company enters the post-creation phase.

2. The launch

At the end of this first stage in the company's life, the company exposes itself to the market through a communication campaign that formalizes the beginnings of its activity. Depending on their budget and strategy, companies have a variety of means at their disposal to make their public debut. It's at this point that the company comes face to face with the appreciation of its customers and begins to generate sales.

3. Development

At this decisive stage in the company's growth cycle, the company has been in business for an average of 3 years. In addition to steadily increasing sales thanks to its growing reputation, the company is starting to make a profit. Internally, the company is experiencing a period of emulation, with new recruits and the loyalty of its first customers.

During its development, the strength of its brand image enabled it to gain a foothold over competing organizations. But despite constant growth, it remains a young company and must make strategic choices to maintain this momentum.

4. Stabilization

After a growth period of around two years, the company enters the longest phase of its life cycle. It can enjoy several decades of constant sales maturity: this is a prosperous phase for the company, which enjoys financial and managerial stability. During this comfortable phase, the company rests on the foundations of its success. Its operations are sound and its processes well-established; it does not need to make major investments to maintain business.

This lull is an opportune time to prepare for the future and guard against an inevitable decline. Managers need to think about renewing and innovating in order to bounce back from this predicted slowdown, but also to begin the process of passing on the company's legacy.

5. The decline

This stage is characterized by a slowdown in activity, the departure of employees, and a drop in the number of customers and sales. It may be due to stagnation in the face of innovative competition, or to a lack of development prospects. A slowdown in the course of a company's life cycle is a preventive signal, not the pure, simple and definitive extinction of the business.

To rise to the challenge, companies need to seize opportunities and invest in technologies. Digital signage is one of them: on internal communication screens or at points of sale, it modernizes brand image and conveys corporate culture through new experiences. For companies wishing to accelerate their digital transformation and return to growth, the Cenareo digital signage solution is ideal for broadcasting an infinite range of content to all types of screens. Its centralized, remote management of screens, its intuitive, accessible platform and its powerful campaign contextualization algorithm make it the partner of choice for developing high-impact communications.

It is through innovation that the company can hope to overcome the decline and return to the development or stabilization phase, instead of heading for an even more severe downturn.

6. Transmission

This final stage marks the end or renewal of the company's life. The company must have initiated the succession process if it is to bounce back, or risk precipitating its downfall. The company's survival depends on it, particularly in the eyes of potential buyers who are reluctant to commit themselves to the takeover of a company whose value has been reduced and whose activity is difficult to revive.

To perpetuate the company's existence, the entrepreneur can engage in a sale or merger & acquisition. This will give the company a new lease of life by taking a different trajectory, avoiding total decline and bouncing back to new growth.

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