NISM Certifications · NISM-Series-XV: Research Analyst · Industry Analysis
In the industry life cycle framework used by research analysts, which stage is typically characterised by slowing sales growth, intense price competition and consolidation through mergers among firms?
The maturity stage is characterised by slowing sales growth, strong price competition and consolidation through mergers. Demand is saturated, so firms fight for market share on cost and price, and weaker players exit or get acquired, unlike in the pioneering and rapid growth stages.
- APioneering (introduction) stage
- BRapid growth stage
- CMaturity stageCorrect
- DStart-up funding stage
Explanation
In the maturity stage, growth rates slow down as the market gets saturated. Firms compete on price and cost efficiency, and weaker players exit or are acquired. The pioneering and growth stages show rising demand and entry of new firms rather than consolidation.
Did you get it right without looking?
One question tells you little. A timed set on Industry Analysis shows your real accuracy, how long you take and where you lose marks.
More Industry Analysis questions
- Which of the following is an example of a cyclical industry as classified in industry analysis?
- Under Porter's five forces framework, which situation most clearly increases the bargaining power of buyers in an industry?
- An industry has very high fixed costs, large capacity that can be added only in big blocks, and products that customers see as near-identica…
- Which of the following is an example of a cyclical industry, as opposed to a defensive industry, in industry analysis?
- In the Porter framework used for industry analysis, which of the following would most directly increase the bargaining power of buyers in an…
- Using Porter's five forces framework, an analyst finds that a cement industry has many small buyers who each purchase little, with no abilit…