There are countless examples of companies whose life cycles can be represented by the adjoining graph. There is the period of rapid growth, after which the company hits a peak, then settles into a plateau or state of equilibrium. At this point, shareholders start to get worried, share prices go down, and everyone begins to speculate about the future of the company.
The following article explains why this process is natural, and almost essential for a long life cycle of any company. These periodic slowdowns are inevitable, though management can and should strive to make decisions that slow down the decline and reverse it quickly. In order to make these decisions, it is crucial to understand the forces responsible for slowing down these seemingly unstoppable companies.