This module is part of the 2027 curriculum. You are following the 2026 curriculum, where it is not taught in this form. Switch if you are sitting the exam under the 2027 curriculum.
Lesson 2 of 10 · 13 min
Strategy over the life cycle and addressable markets
What a company's strategy should look like depends on its life-cycle stage: startups prove a business model, growth firms are judged on the size of the market they can reach, declining firms cut, restructure or reinvent.
In short
- Startups have little revenue, negative cash flow and few assets. Strategy centres on innovation, partnerships and raising equity; the risk of failure is very high.
- Growth firms (often disruptors using business-model innovation) are analysed by sizing their market: total addressable market (TAM) → serviceable market (focus and geography) → obtainable market (current scale and strategy).
- A top-down revenue forecast projects the three market sizes and the firm's share of its obtainable market, year by year.
- Declining firms: revenue falling or growing well below nominal GDP or peers, often with excess capacity that intensifies rivalry. Typical responses: cost management, restructuring, downsizing or exiting, sometimes reinvention.
- Creative destruction threatens firms at every stage: new products make old ones obsolete.
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