Intensity of Rivalry (one of Porter’s Five Forces)

The strength of rivalry among rivals in a business identifies the level to which organizations within a market place stress on each other and restrict each other’s revenue potential. Then competitors are trying to steal profit and market share from one another if rivalry is fierce. This reduces profit potential for all firms within the industry as a result. Based on Porter’s 5 forces framework, the strength of rivalry among companies is just one of the primary forces that form the competitive framework of a industry.

Porter’s strength of rivalry in a business impacts the competitive environment and influences the capability of current businesses to quickly attain profitability. For instance, high intensity of rivalry means rivals are aggressively focusing on each other’s areas and aggressively pricing items. This represents costs that are potential all rivals inside the industry.

Tall intensity of competitive rivalry could make a market more competitive and so decrease revenue prospect of the existing firms. In contrast, low strength of competitive rivalry makes a business less competitive. In addition it increases revenue prospect of the firms that are existing.

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