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, intense price competition, consolidation among players and stable but lower profit margins?
The maturity stage is correct. Growth slows toward the economy's pace, firms compete on price and efficiency, weaker players consolidate or exit, and margins stabilise at lower levels. Earlier stages show faster expansion or high uncertainty, so they do not fit this description.
- APioneering (introduction) stage
- BRapid growth stage
- CMaturity stageCorrect
- DStart-up funding stage
Explanation
In the maturity stage, market growth slows to roughly the pace of the economy, competition shifts to price and cost efficiency, and weaker players exit or merge. The rapid growth stage still shows fast sales expansion, and the pioneering stage has high uncertainty and losses.
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