Mature Firm


DEFINITION of 'Mature Firm'

A company that is well-established in its industry, with a well-known product and loyal customer following with average growth. Mature firms are categorized according to the business stage it is currently in. These types of firms have passed the stage of rapid growth and tend to grow at the same rate as the overall economy. They also tend to have several equally well-established competitors, making price competition a significant factor in their ability to increase profits.


Businesses are usually thought of as going through between four to eight phases. For example: Idea, emerging/startup, growing, expanding, mature and finally declining. The stocks of mature firms often pay dividends because the companies are past the point of needing to reinvest all their profits in the company, like they did when it was growing rapidly. Coca-Cola, Pepsi Co., Johnson & Johnson and Procter & Gamble are examples of mature firms. They have been around for many years and sell products that consumers use on a regular basis, but they also face ongoing, significant competition.

  1. Dividend

    A distribution of a portion of a company's earnings, decided ...
  2. Comparative Advantage

    The ability of a firm or individual to produce goods and/or services ...
  3. Barriers To Entry

    The existence of high start-up costs or other obstacles that ...
  4. Life Cycle

    The course of events that brings a new product into existence ...
  5. Declining Industry

    An industry where growth is either negative or is not growing ...
  6. Growth Company

    Any firm whose business generates significant positive cash flows ...
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