ITPEC FE Morning April 2021 Question 67
In a product life cycle, which of the following is a stage where the withdrawal of some companies is observed when the demand peaks, and decision-making is necessary to determine whether it is possible to gain a strong foothold?
Explanation
Maturity stage — demand peaks, weaker companies withdraw, and each firm must decide whether it can hold a strong position.
The product life cycle runs through four stages. In introduction, demand is small and the task is to build awareness. In growth, demand rises quickly and competitors enter. In maturity, demand reaches its peak and stops growing, competition turns into a fight for share, and some companies pull out. Those that remain decide whether they can secure a solid foothold or should harvest and exit. In decline, demand falls.
Answer (d)
Why not others:
- •(a) Decline stage — demand is already falling, well past its peak
- •(b) Growth stage — demand is still rising and new competitors are entering, not withdrawing
- •(c) Introduction stage — demand is low and the market is just being created
Key rule: Rising demand and new entrants mark growth; peak demand, saturation and shake-out mark maturity; falling demand marks decline.
Business Strategy Management · AI-written, may contain errors
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