Benefit

Provides approximate saturation or substitution trends at an early stage.

Shows approximately how much time is still available to act optimally in substitution processes.

Provides indications for the assessment of long-term market growth in a specific product or service segment.

Indicates whether the time is right to enter a market.

Shows whether the time has come to exit the market.

Avoids bad investments in an already saturated or even dying market and thus in a product or service segment that no longer has any future prospects.

Serves as a planning aid for the pricing strategy or the switch from a quality strategy to a skimming strategy.

Applications

For many companies, mature or saturated markets and the associated risk of substitution by new solutions are a reality. The associated declines in sales and turnover pose a problem and can threaten viability. It is therefore important to monitor the process of market saturation. The substitution time curve is an instrument that, under certain conditions, can approximately predict the course of the displacement of a company's own technology, products and services established on the market by innovative problem solutions. This tool is particularly interesting for companies that make good profits due to their excellent market position in certain market segments and therefore feel secure in their competitive position, because: Today's successes are slaughtered on tomorrow's altar and even the strongest market leaders run the risk of being partially or even completely substituted by new solutions.

With the help of the substitution time curve, this danger can be recognized at an early stage:

The market cycle reflects the entire process from the dissemination of a new idea, its commercialization and the substitution of existing solution(s) to its displacement by subsequent innovations. If you now have sufficient data on the spread of a product or technology within such a market cycle, you can use this information to calculate the further displacement processes in specific market segments in advance. This makes it possible to show how the future course of a substitution process could develop or when the saturation point in a market will be reached. Important strategic decisions can then be made on the basis of this calculated trend.

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