NISM Certifications · NISM-Series-XV: Research Analyst · Industry Analysis
In the industry life cycle model, which stage is typically characterised by slowing sales growth, intense price competition, consolidation and weaker firms exiting, while the survivors have stable but modest profits?
The maturity stage fits this description. Market growth slows to roughly the pace of the economy, competition turns to price, weaker firms exit or merge, and surviving companies earn stable but modest profits. Earlier stages show rapid growth and heavy investment rather than saturation.
- APioneering (start-up) stage
- BRapid accelerating growth stage
- CMaturity stageCorrect
- DIntroduction stage
Explanation
In maturity, growth slows toward the economy's rate, competition shifts to price, margins are squeezed and weak players exit or merge. Early stages feature high growth and heavy investment, not consolidation of a saturated market.
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