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NISM Certifications · NISM-Series-XV: Research Analyst · Industry Analysis

Which of the following is typically a feature of the 'maturity' stage of an industry life cycle?

In the maturity stage, industry growth slows, market shares become stable and consolidation among firms is common. Rapid growth with many entrants belongs to the growth stage, while falling demand and exits characterise decline.

  1. AVery rapid growth with many new entrants and negative profits
  2. BSlowing growth, stable market shares, and consolidation among firmsCorrect
  3. CSharp decline in demand with firms exiting
  4. DProduct not yet commercialised, only research activity

Explanation

In maturity, growth rates slow to near the economy's pace, market shares stabilise and weaker firms are consolidated or acquired. Rapid growth with entrants marks the growth phase, decline marks the final stage, and research marks the pioneer stage.

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