ACCA Strategic Professional · Strategic Business Leader · Competitive forces
Zelta Cloud operates in a market where sales growth has slowed sharply, most customers are existing users replacing suppliers, and several competitors have exited. Which stage of the industry life cycle does this best describe, and what is the typical competitive implication?
The industry is in maturity. Growth has slowed, demand comes from replacing suppliers, and weaker firms have left. Competition becomes share-based and price-driven, so firms focus on cost efficiency and differentiation to defend position rather than on expanding the overall market.
- AMaturity, with intense price-based rivalry and a focus on market share and cost efficiencyCorrect
- BIntroduction, with high uncertainty and rivalry based on product innovation
- CGrowth, with rapidly expanding demand reducing rivalry between firms
- DDecline only, with all firms expected to withdraw immediately
Explanation
Slowing growth, replacement-based demand and consolidation are features of maturity. Competition shifts to share-taking, price and cost control. Growth would show rapidly rising demand and new entrants, so it is wrong.
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