Slow Cycle Markets


Slow-cycle markets reflect strongly shielded resource positions wherein competitive pressures do not readily penetrate the firm’s resources of strategic competitiveness. In economics, this situation is often characterized as a monopoly position. A firm that has a unique set of product attributes or an effective product design may dominate its markets for decades. This type of competitiveness position can be established even in markets where there is significant technological change.

 

Although the idea of monopoly, which has a single seller, restricted output, and high prices, is largely disallowed because of government policy restrictions, subtle and more complex variations are possible at local markets.

 

Effective product design may enable the firms that produced them to dominate their markets for many years. These firms’ advantages are drawn largely from their special core competencies, because their resources and capabilities are difficult to imitate. Because these markets (and hence the firms that operate in them) are largely protected, they usually enjoy the highest average price increase over time. Alternatively, price increases in standard-cycle markets often vary closely around zero.

 

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