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

The strength of rivalry among rivals in a market relates to the level to which businesses within a market place stress on the other person and restrict each other’s revenue potential. If rivalry is intense, then rivals are attempting to take revenue and share of the market in one another. 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 amongst the primary forces that form the competitive framework of a industry.

Porter’s strength of rivalry in a market impacts the environment that is competitive influences the capability of current organizations to quickly attain profitability. For instance, high strength of rivalry means rivals are aggressively targeting each other’s areas and aggressively pricing items. This represents prospective expenses to all rivals in the industry.

High intensity of competitive rivalry will make a market more competitive and therefore decrease revenue possibility of the existing firms. Continue reading