Drivers of the lifecycle: the example of the German insurance industry

Michael Menhart and Carsten Rennhak

No 2006-03, Reutlingen Working Papers on Marketing & Management from Reutlingen University, ESB Business School

Abstract: Lifecycles have been accepted widely as a matter of fact in business. Existing literature focuses on their theoretical implications for product managers and corporate strategists. There are major shortcomings of the research in that field concerning the populations covered (if at all, mostly hardware) and the theoreticcal as well as empirical analysis of the drivers of the lifecycles in the various industries. Based on the research of Menhart et al. (2003), we chose a population of service organizations to analyze the drivers of the lifecycle. Biological lifecycles describe the development processes of an individual from birth to death. Economic life cycle concepts assume, that in analogy to biological organisms, economic systems also experience typical phases of development in their evolution. In the economic literature, life cycle concepts were used to explain the development patterns of single products, organizations, technologies and whole industries. In the standard model of the life cycle concept, specific characteristics of the unit of analysis such as sales volume, turnover or number of competitors first increase to a maximum, then decrease significantly and finally reach a level of stability, or they are discontinued completely. We have developed a concept for an insurance specific industry life cycle with a non-typical maturation and degeneration phase, and discuss to what extent the concept of Maslow's pyramid of needs can have explanatory power regarding the pattern of density dynamics.

Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:esbwmm:200603

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