Mature Market

A mature market is a market that is judged to has reached it’s full potential in terms of market penetration.

Consumers do not have to be educated on the product or service anymore, they already know why they need it and where to purchase it, and demand is no longer growing (if any) at a fast pace.

Companies stop developing their products except to match up to competitors who have introduced new fancy features.

Products have reached the mainstream with little marketing need to educate consumers of what a product does and how to use it.

At this stage of a market cycle, a few big players would dominate the market as all the smaller ones that are predicted to fold has folded.

This leaves a few player with considerable market share.

Differentiating factors would be mostly down to price competition and branding.

There is little room for a new entrant unless it has something innovative to offer that can potentially disrupt the mature market or the mature industry as a whole.

Mature markets and startups

Modern innovative startups, especially tech companies, will often find it difficult to break into a mature market unless they have something exciting to offer.

Consumers have brand loyalty with the established brands and would find it difficult to switch and rather stay with the proven ones.

And when a new company manages to attract the attention of a big established company, they have every incentive and the power to crush them or acquire them outright.

In fact, many companies are conceptualized with the ultimate goal of being acquire being the exit strategy.

This is because fighting a long term battle with cash rich corporations is unlikely to bring any positive outcome.

And being bought out is often not a strategic choice, but the only logical exit.

Because of proven demand of the products and services that mature markets have, many new businesses would still the pulling-power too tempting to ignore.

This is why the most successful startups in recent times often work on developing new technology or concepts that either disrupts a mature market or creates a new category that fills a gap in a mature market.

When proof of concept is achieved, the possibilities can be limitless.

For example, the industry for automobiles is a mature market. Everybody knows the benefits and drawbacks that having his or her own car brings. They know where to buy them, how to buy them, and have their own favorite brands. In addition, everybody who want a car and can afford one would already have one. It is therefore very hard for a startup to make any headway in this space.

Yet Tesla with it’s electric cars has done reasonably well by differentiating themselves from the others. And Uber has created a new category and successfully replicated it’s disruptive concept all over the world.

While it might take a lot of resources for a new company to be successful in a mature market, the rewards can be overwhelming if the company manages to break into it.

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