What is a potential consequence when a company reaches maturity?

When a company reaches maturity, it often experiences thicker profit margins and lower cash flow due to market saturation. This means that growth rates begin to stabilize, and the company may struggle to maintain previous levels of profitability as competition intensifies. In a mature market, it is common for prices to decrease due to increased competition and the need to differentiate products from those of competitors. As a result, profit margins can become thinner, making it challenging for the company to sustain cash flow at levels experienced in earlier growth stages, where rapid expansion and market demand were more favorable. This transition can lead to a focus on cost management and efficiency to shore up financial health, as well as a reevaluation of strategies to ensure continued relevance in a competitive landscape.

In contrast, the other options do not accurately reflect the typical consequences faced during a company’s maturity phase, as heightened competition does arise, but it is not the only or most definitive outcome, nor does consumer demand consistently increase.