Entrepreneurship and Small Business (ESB) V2 Certification Practice Exam

During which phase of the business life cycle is the company typically well-established and has a sizable market share?

1. Decline

2. Takeoff

3. Maturity

4. Growth

The correct answer is: Maturity

The phase of the business life cycle where a company is typically well-established and enjoys a sizable market share is maturity. In this stage, the business has already undergone initial growth and has reached a point where it stabilizes in terms of revenue and profit. Companies in the maturity phase often benefit from brand recognition, customer loyalty, and operational efficiencies that have been developed over time. Additionally, market saturation is common at this stage, meaning that most potential customers have already been reached, but the business can maintain its competitive advantage through strong marketing strategies, product adaptations, and by exploring new market segments. During the growth phase, the company is expanding and increasing its market presence, which is characterized by rapid sales growth and customer acquisition, but it has not yet established the solidified market share seen in maturity. In contrast, the decline phase signifies a downturn in sales and market presence as competitors and newer, more innovative products may have emerged, leading to reduced market share. The takeoff phase represents the transition from a small to a larger scale of business operations, but it does not reflect the stability and maturity of the business that occurs in the maturity phase.