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Porter's Five Forces Analysis: Rivalry Among Competitors

Strategies and resources for creating a Five Forces Analysis

What is Competitive Rivalry?

Competitive rivalry is a measure of the extent of competition among existing firms. Intense rivalry can limit profits and lead to competitive moves, including price cutting, increased advertising expenditures, or spending on service/product improvements and innovation.

Questions to ask include:

  • How intense is competition in the industry?
  • What is the market share of the top companies? Is the industry fragmented or dominated by a few firms?
  • What is the rate of industry sales growth? Is the industry mature or in a slow growth phase?
  • Are products differentiated? Can customers switch with ease?
  • Are there high fixed costs or high exit barriers that keep companies competing?
  • What does the Merger & Acquisition (M&A) landscape look like? Are competitors getting stronger through mergers?
  • Are there global opportunities or threats?

Who are the Competitors?

Research the Competition: Market Share

Research the Competitive Environment: Sales Growth

Research the Competitive Environment: Mergers & Acquisitions (M&A)

Research the Competitive Environment: Global Conditions