Mature Firm

AAA

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.

INVESTOPEDIA EXPLAINS 'Mature Firm'

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.

RELATED TERMS
  1. Industry Lifecycle

    A concept relating to the different stages an industry will go ...
  2. Comparative Advantage

    The ability of a firm or individual to produce goods and/or services ...
  3. Dividend

    1. A distribution of a portion of a company's earnings, decided ...
  4. Declining Industry

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

    Any firm whose business generates significant positive cash flows ...
  6. Barriers To Entry

    The existence of high start-up costs or other obstacles that ...
Related Articles
  1. The Ups And Downs Of Investing In Cyclical ...
    Investing

    The Ups And Downs Of Investing In Cyclical ...

  2. Conglomerates: Cash Cows Or Corporate ...
    Investing Basics

    Conglomerates: Cash Cows Or Corporate ...

  3. Market Cycles: The Key To Maximum Returns
    Active Trading

    Market Cycles: The Key To Maximum Returns

  4. Cyclical Versus Non-Cyclical Stocks
    Options & Futures

    Cyclical Versus Non-Cyclical Stocks

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center