An industry analysis for manufacturers of a small personal care gadget observed the following characteristics:
1. Industry sales have grown at 15-20% per year in recent years are expected to grow at 10-15% per year over the next three years, still well above the economic growth rate.
2. Some U.S. manufacturers are attempting to enter fast growing non-U.S. markets, which remain largely unexploited.
3. Some manufacturers have created a new niche in the industry by selling directly to customers through mail order. Sales for this industry segment are growing at 40% per year.
4. The current penetration rate in the U.S. is 60% of households and will be difficult to increase.
5. Manufacturers compete fiercely on the basis of price, and price wars within the industry are common.
6. Some manufacturers are able to develop new, unexploited niche markets in the U.S. based on company reputation, quality, and service.
7. Several manufacturers have recently merged, and it is expected that consolidation in the industry will increase.
8. New manufacturers continue to enter the market.
-Characteristics 4 and 5 would indicate that the industry is in the _________ stage.
A) start-up
B) consolidation
C) maturity
D) relative decline

Question

Quizplus · Accepted Answer

Characteristic 4 suggests that the market is in the maturity stage because the penetration rate is high and it will be difficult to increase further. Characteristic 5 also supports this as price wars are common in mature markets. The other characteristics such as growth rates, attempts to enter new markets, and new entrants suggest that the market is still dynamic, which is a common feature of the maturity stage. Additionally, the mention of consolidation in the industry indicates that players are trying to maintain profitability by merging, which is another hallmark of the maturity stage.

An Industry Analysis for Manufacturers of a Small Personal Care