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Over the past few years, the companies in an industry have experienced positive but decreasing profitability and growth rates. The companies have begun to compete intensely with each other and customers switch frequently among brands. This industry’s life-cycle stage is most accurately described as:

A shakeout.

The shakeout industry life-cycle stage is characterized by slowing (but still positive) growth, intense competition, and declining profitability, as demand begins to approach market saturation. In contrast, the decline industry stage is characterized by negative growth. The lack of brand loyalty among customers suggests the industry has not yet reached the mature stage.

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