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International competition increases, prompting fierce advertising and price wars which in turn cost heavily to the lower end competitors in their transition to maturity. Industry profitability falls due to the over saturated market at this point in time, heavy spending on research and innovation and declining product competitiveness bring about a downward shift in cash flows.
Slower rates of market growth causes competitive pressures to intensify, often producing a shake-out of weaker competitors and slimmer profit margins industry-wide. Firms need more strategic planning and emphasize process on innovation to push hard for cost reduction...
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