CS Professional · Strategic Management and Corporate Finance · Competitive Positioning
In the industry life cycle model, which stage is typically characterised by slowing market growth, intense price competition, emphasis on cost reduction and a shake-out of weaker competitors?
The maturity stage. Market growth slows because demand is saturated, so firms fight on price, cut costs and weaker competitors are shaken out. The growth stage instead has rapidly rising demand, while decline has shrinking demand and firms harvest or exit.
- AIntroduction stage
- BGrowth stage
- CMaturity stageCorrect
- DDecline stage
Explanation
In maturity, growth slows as the market saturates, so firms compete on price and efficiency and weaker players exit. Growth stage features rapidly rising demand and new entrants, introduction has low sales and high costs, and decline sees falling absolute demand and exit or harvesting.
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