A mature industry is an industry that has passed both the emerging and growth phases of industry growth. At the beginning of the industry lifecycle , new products or services find use in the marketplace. Many businesses may spring up trying to profit from the new product demand. Over time, failures and consolidations will distill the business to the strongest as the industry continues to grow. This is the period where the surviving companies are considered to be mature. Eventually, growth will slow as new or innovative products or services replace this industry offering and begin a new industry lifecycle.
Log in or sign up to add this lesson to a Custom Course. Log in or Sign up. New products and services are developed by companies every day, but occasionally, a whole new market is born. Think of the auto industry in the earlys, or the computer industry in the s. Every industry you can think of, at some point in history, was a new market. Just like individual products, these markets go through a lifecycle.
The Little Book of Valuation. There are clear differences across mature companies in different businesses, but there are some common characteristics that they share. In this section, we will look at what they have in common, with an eye on the consequences for valuation. Revenue growth is approaching growth rate in economy : In the last section, we noted that there can be a wide divergence between growth rate in revenues and earnings in many companies.
Entrepreneurs thrive in high-growth evolving markets. There is more revenue to compete for every year, and entrepreneurial innovation can be a key driver of value creation. However, every growth market must mature eventually, and entrepreneurs must be able to navigate the transition to maturity. Often the very basis for competition and value creation will change radically when a market matures.