NISM Certifications · NISM-Series-XV: Research Analyst · Industry Analysis
In the industry life cycle framework used in industry analysis, which stage is typically characterised by slowing sales growth, intensifying price competition and consolidation through mergers of weaker firms?
The maturity stage is correct because industry growth slows, competitors fight on price, margins come under pressure and weaker firms are absorbed or exit through mergers, unlike early stages where demand is rising and new entrants arrive.
- APioneering (introduction) stage
- BRapid growth stage
- CMaturity (stabilisation) stageCorrect
- DEmbryonic stage
Explanation
In the maturity stage growth slows to near the pace of the economy, competition shifts to price, margins are squeezed and weaker firms exit or merge. The pioneering and growth stages show rising demand and new entry 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
- In the industry life cycle framework, which stage is typically characterised by slowing growth in sales, consolidation among competitors, an…
- In industry analysis, which of the following best describes the 'cyclical' nature of an industry such as automobiles or cement?
- An analyst studies an industry whose sales fall sharply in recessions but rebound strongly in expansions, such as passenger cars and capital…
- Under Porter's five forces framework, which situation would most clearly indicate HIGH bargaining power of suppliers to an industry?
- An industry's total sales were Rs 800 crore in year 1 and Rs 1,152 crore in year 3, growing at a constant compound rate. If the growth conti…
- Which of the following is a cyclical industry from an analyst's perspective?