Sometimes, poor readings by such yardsticks foretell potentially terminal corporate illness — the erosion of the corporate life cycle. Such malaise can be spurred by cultural shifts affecting consumer behavior, often involving the impact of advancing technology — historically, the biggest driver of industrial revolution.

Even when the numbers reflect corporate health, companies may be manifestly doomed because of cultural and technological shifts affecting consumer behavior. All too often, they fail to adapt, largely because of the inertia that derives from earning so much for doing the same things the same way for so long. Think RadioShack, Palm, Polaroid — giants in their respective fields felled by technological change.

A good way to watch for fundamental early signs of demise is to periodically ask: Are the reasons that the company exists still relevant today? Because of cultural and technological shifts, will the company’s market be there tomorrow?

Source: CNBC.COM

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