Mature Industries
Once an industry has exhausted its period of rapid growth in revenues and earnings, it moves into maturity. Growth in companies in mature industries closely resembles the overall rate of growth of the economy (the GDP). Earnings and cash flow are still likely positive for these companies, but their products and services have become less distinguishable from those of their competitors. Price competition becomes more vicious, taking profit margins along with it, and companies begin to explore other areas for products or services with potentially higher margins. Many of our economy's most closely watched industries, such as airlines, insurance and utilities, can be categorized as mature industries.