Research Onchanges In Enterprise' Competitive Advantage Based On Life-cycle Theory

Enterprise's development has the life-cycle characteristics, while the competitive ability and life-cycle characteristics are relevant. The research on firms'competitiveness decay which is different life cycle stages is of great practical and theoretical significance. How to judge the Life-cycle stage of the enterprise also has the different qualitative and quantitative methods. Through the comparative analysis of the most methods, i decided to take 5-year average growth rate of main business revenue as life-cycle stages of division methods finally.This paper selected the "Fortune" magazine's world top 500 enterprises as my research sample of the competitiveness decay. In this paper, I made the financial analysis about 60 enterprises which are out of a sample list of 1999 - 2008. I choose 6 indicators which are asset-liability ratio, debt service coverage ratios, inventory turnover, asset turnover, return on equity and sales of net profit margin from the debt, operations and profitability forms to make the financial analysis. For comparison, this paper also made the average data for the calculation of financial indicators of 2008 list of Fortune 500 companies, in order to find out of the differences between the out list sample and the list sample.Through the comparison, we have the overall financial analysis of conclusions which come from the world top 500 enterprises:Growth stage: The sample enterprises have expanded too fast as a result of debt is too large, as well as the decline in profitability. These two factors led to growth stage companies tend to lose the competitive edge, and then died in the golden age of development.Maturity stage: The most likely result in the loss of competitive advantage in business because it is caused by the sound operation of insufficient capital investment, as well as lack of profitability. Recession stage: a recession market companies can not get enough profitability.Chapter V is for those who can not be derived from the overall data describing the causes of the loss of competitive advantage in-depth study of individual enterprises. So that to find the personality business reasons for the loss of competitiveness.