What is an 'Inflection Point'

An inflection point is an event that results in a significant change in the progress of a company, industry, sector, economy or geopolitical situation and can be considered a turning point after which a dramatic change, with either positive or negative results, is expected to result. Companies, industries, sectors and economies are dynamic and constantly evolving. Inflection points are more significant than the small day-to-day progress typically made, and the effects of the change are often well known and widespread.

BREAKING DOWN 'Inflection Point'

Based on mathematical charting models, the inflection point is where the direction of a curve changes in response to an event. In order to qualify, the shift must be noticeable or decisive and attributed to a particular cause. This principle can be applied to a variety of economic, business and financial information, such as shifts in the gross domestic product (GDP) or changes in security prices, but it is not used in reference to normal market fluctuations that are not the result of an event.

Andy Grove, Intel's co-founder, described a strategic inflection point as "an event that changes the way we think and act." Inflection points can be a result of action taken by a company, or through actions taken by another entity, that has a direct impact on the company. Additionally, inflection points may be caused by intentional action or by unforeseen events.

Strategic Inflection Point