What is an inflation point?
An inflection point is an event that causes a significant shift in the progress of a business, industry, sector, economy, or government. It can also be considered a turning point, after which a significant change is likely to happen, whether good or bad.
Businesses, industries, regions, and economies are all dynamic and constantly changing. Moments of change are more important than the small steps forward that are usually made every day, and the effects of the change are often well-known and felt by many.
How to Read an Inflection Point
From a mathematical point of view, the inflection point is where a curve’s direction changes because of an event. For the change to count, it must be clear or significant and linked to a specific cause.
This rule can be used for different types of economic, business, and financial data, like changes in the gross domestic product (GDP) or the prices of securities. However, it is not used for regular market changes not caused by an event.
Andy Grove, one of the founders of Intel, said that a strategic turning point is “an event that changes the way we think and act.”
Inflection points can happen when a company or someone else does something that directly affects the company. Inflection points can also be caused by an accident or something unplanned.
Unique Things to Think About
For example, regulation changes could be a turning point for a business previously held back by problems with following the rules. The invention of the Internet and smartphones were turning points in technology. A political turning point was the collapse of the Berlin Wall or communism, in Poland and other Eastern Bloc nations.
Unexpected occurrences might include economic downturns like the 2008 financial crisis or natural calamities that disrupt the company. This means that a turning point might not be apparent until after a change in direction has been noticed.
Example from Real Life
A turning point typically indicates the industry must alter drastically to survive. When the smartphone emerged, other mobile technology businesses had to adapt to survive.
Palm Inc., which made the Palm Pilot personal organizer, tried to adapt to changing market conditions by releasing the Palm Treo smartphone. However, it couldn’t compete with better products in the same market, like the Blackberry and the iPhone.
Because of the competition, the value of the stock dropped a lot. As part of its 2010 announcement that it was buying Palm, HP Inc. offered about $5.70 per common share of Palm stock.
As of Q2 2021, Apple has a 15% share of the world smartphone market. This is less than Xiaomi (16%) and Samsung (18%).
When the iPhone came out, the shift in the cell phone market toward smartphones affected most phone companies, not just Palm.
One of them is Nokia. Another is Motorola.
If you looked at the cell phone market at the beginning of the 2000s, Nokia had 30.6% of it. Nokia had to sell its cell phone business to Microsoft in 2013 because it couldn’t keep up with the growth of smartphones.
Microsoft sold the company in 2016 because they couldn’t figure out how to bring it back to life.
The business still makes cell phones in the mid-to-low range, but it’s not nearly as successful as it used to be.
What Is a Fork in the Road?
A point of inflection is where a curve changes from going up or down to going down or up. It is also called a concave upward or concave downward point. In calculus and mathematics, points of inflection are looked at. In business, the point of inflection is when a significant change makes a business turn around. This point of change can be good or bad.
What Does “Inflection Point” Really Mean?
In everyday language, an inflection point is where something significant changes. The change could be good or bad, depending on how the turning point affects the subject.
An inflection point is a point where two lines meet.
When you change the slope of a line from up to down or down to up, you have reached the inflection point. The slope starts to change at this point, no matter how fast or significant the change is.
Conclusion
- An inflection point is a significant event that alters a corporate or social process.
- Inflection points are more significant than a company’s daily advancements, and many people typically experience their effects.
- When a turning point is found, it usually means that the industry needs to make significant changes to stay in business.
- An inflection moment might be intentional (such as a firm or rival doing something) or unforeseen.
- If businesses can’t change with the times, they will fall behind their competitors and have to shut down. Inflection points can be helpful for people who can change with the times.
