Outline
Great Company Or Growing Industry?
The difference of the cycle industry in each sequence.
I. Initial Growth/Emerging Industries
A. Companies involved in establishing emerging industries are generally participating in perilous business, as their primary concerns are raising sufficient funds to engage in early-stage research and development.
II. Rapid Growth Industries
A. Companies in industries that are benefiting from rapid growth have sales and earnings that are expanding at a faster rate than firms in other industries and begin to lower prices in response to competitive pressures and the decline of costs of production.
III. Mature Industries
A. Once an industry has exhausted its period of rapid growth in revenues and earnings, it moves into maturity.
IV. Declining Industries
A. Some factors that could contribute to a declining industry are consumers decreasing their demand for the industry's product or service, technology that supplants legacy products with new and better ones, or companies in the industry failing to be competitive in pricing.