1) CONSUMERISM: Savvy consumers always seek the lowest price.
2) DISINTERMEDIATION: This is a fancy way of saying “eliminate the middleman”.
3) AUTOMATION: Industry stalwarts have their capital tied up in archaic equipment. Startup businesses have the advantage using the latest and most efficient equipment. Automation replaces fixed costs with lower-priced solutions.
4) CONVERGENCE: In the early years of a new industry, knowledge is horded by a select few. Over time, through education and employee musical-chairs, the level of knowledge escalates industry-wide, undermining specialized occupations such as ours.
Number of varieties/varietal life span (years)
20
15
10
5
Mean of varieties introduced
Mean varietal life span
1950
1952
1954
1956
1958
1960
1962
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
0
5) CONSOLIDATION: Consolidation involves large companies purchasing smaller competitors or driving them out. While the grass seed industry has seen several noteworthy failed consolidation attempts, it is also experiencing an increasing number of smaller mergers and buy-outs.
6) GLOBALIZATION: Foreign competition buys up or pressures local markets with lower priced products. Example: Overflow seed from Canada and Europe has a huge impact on U.S. pricing.
7) THE INTERNET: The Internet is becoming a powerful tool for allowing customers to instantaneous price shop among products.
The history of cotton breeding reveals an interesting and meaningful relationship between the number of varieties hitting the market and the average lifespan of a variety. Back in the 1960s when few varieties were being introduced, the average variety lifespan was a stable 12 years. As the number of introduced varieties climbed to five per year, the lifespan dipped slightly. By 1994, the average number of varieties introduced per year exceeded market demand, sending the average lifespan plummeting to less than five years.
References:
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