Market evolution can be divided into four stages: Emergence, Growth, Maturity and Decline
Emergence: The emergence of the market involves a latent demand being awakened with the introduction of a new product category.
Growth: There is a gradual increase in the demand for the product category as more customers become aware of it. To satisfy the demand new companies enter the market.
Maturity: As the number of companies in the market becomes larger they divide into groups that cater to different market segments. This may involve consolidation and creation of larger companies as those in the same group merge together.
Decline: As the number of companies becomes very large, there is a drop in margins and only a few companies remain sustainable. The demand for the products decreases too as customers are attracted to new products. This ultimately leads to the exit of all the companies in the market and the market for the particular product category comes to an end.