Initially, a company develops a product that is designed to meet the demands of the consumers. The company develops a product that is maneuvered to gain competitive advantage, meet consumer demands and to sustain. The stages of an industry life cycle model states that there is introduction or the development pace of a product. The product is researched and developed. The product is then introduced into the market. When a new product is launched into the market, there will be lukewarm response towards the product. This is the time taken by the consumers to assess the products and the need for the product will be developed by the consumer.
Then the product will see a rapid growth phase . This will continue and generate profits for the company. However, any product will reach its maturity stage and the need for the product in the consumer base will wane over a period of time. This would lead to the company to see decline in sales for a product. The distinctive stages of a product are the initial inception stage, growth stage, maturity stage and eventual decline in the sales of the product. It is quite evident that any product that is sold will eventually meet a saturation point and lead to decline in sales.
In this paradigm, it is imperative for the companies to develop a strategy that would lead to their long term sustenance. Some of the companies fall into the icarus paradox. The factors that lead to icarus paradox of the companies are discussed in the following section.