THE NATURE OF RIVALRY IN THE INDUSTRY

 The Nature of Rivalry in the Industry

The intensity of rivalry in an industry is a significant determinant of industry attractiveness and profitability. The intensity of rivalry can influence the costs of suppliers, distribution, and of attracting customers and thus directly affect the profitability. The more intensive the rivalry, the less attractive is the industry. Rivalry among competitors tends to be cutthroat and industry profitability low when

(i) An industry has no clear leader.

(ii) Competitors in the industry are numerous.

(iii) Competitors operate with high fixed costs.

(iv) Competitors face high exit barriers.

(v) Competitors have little opportunity to differentiate their offerings.

(vi) The industry faces slow or diminished growth.

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