4 Trajectories of Industry Change - Explained
What are the Trajectories of Industry Change?
If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
What is the 4 Trajectories of Industry Change?
The Four Trajectories of Industry Change is a model proposed by professor Anita M. McGahan (2004), explaining the how industries evolve or change over time.
What Drives Industry Change?
Industries evolve to avoid obsolescence caused by two threats:
- A threat to core activities of the industry. A threat to the recurring activities of companies, which historically generated profits for the industry.
- A threat to the core assets of the industry. A threat to the durable resources, including intangibles such as knowledge and brand capital, that have historically made the organization efficient at performing core activities.
How Do Industries Change?
Pursuant to threats to core activities and core assets, industries change along one of four trajectories.
- Radical Change. When core assets and core activities are both threatened with obsolescence.
- Progressive Change. When neither core assets nor core activities are jeopardized.
- Creative Change. When core assets are under threat but core activities are stable.
- Intermediating Change. When core activities are threatened while core assets retain their capacity to create value
Industry change is inevitable. Organizations must reconfigure themselves to allow for lower revenue growth and develop the ability to remove activities and resources out of the business.