chapter  3
The International Perspective of Dutch Industry
Pages 38

On the other hand, a growing sales record attracts competition. As long as the market is expanding, this is no great problem. It is a different matter when the market begins to show signs of saturation, whereby sales first grow at a slower rate, then stagnate and subsequently decline. In the stage of maturity, this saturation process takes hold. Through increased competition the profit margins decrease. In reaction, attempts sire made to hold the costs down, for example by streamlining the production process which by this time has become standardized. The end of the life cycle is the stage of recession, in which sales decline and demand is limited to replacement purchases. If the product is to survive this stage, then an optimal standard­ ization and rationalization are imperative. Even then, production proves to be unprofitable in many places unless protectionistic measures are taken. Production concentrates where the costs are lowest.