Analyzing the nature and

strength of competitive forces

 The rivalry among competing sellers
• Rivalry among competing sellers intensifies
the more frequently and more aggressively
that industry members undertake fresh
actions to boost their market standing and
performance-perhaps at the expense of rivals
• Whether industry members are racing to offer
better performance features or higher quality
or improved customer service or a wider
product selection
• How frequently rivals resort to such
marketing tactics as special sales promotions,
heavy advertising, rebates or low interest
rate financing to drum up additional sales
How actively industry members are pursuing efforts
to build stronger dealer networks or establish
position in foreign markets or otherwise expand
their distribution capabilities and market presence
• How hard companies are striving to gain a
market edge over rivals by developing
valuable expertise and capabilities
• The frequency with which rivals introduce new
and improved products and thus are
competing on the basis of their product
innovation capabilities
• Rivalry intensifies as the number of
competitor increases and as competitors
become more equal in size and capability
• Rivalry is usually weaker when there are fewer
than five competitors or else so many rivals
that the impact of anyone company’s action is
spread thinly across all industry members
• Rivalry is usually stronger in slow growing
markets and weaker in fast growing markets
• Rivalry increases as the products of rival
sellers become more standardized and/or
when buyer costs to switch from one brand to
another are low
• Rivalry is more intense when industry
conditions tempt competitors to use price cuts
or other competitive weapons to boost unit
volume
• Rivalry increases when one or more
competitors become dissatisfied with their
market position and launch moves to bolster
their standing at expense of rivals
• Rivalry increases in proportion to the size of
the payoff from a successful strategic move
• Rivalry becomes more volatile and
unpredictable as the diversity of competitor
increases in terms of visions, strategic intents,
objectives, strategies resources and countries
of origin
• Rivalry increases when strong companies
outside the industry acquire weak firms in the
industry and launch aggressive, well funded
moves to transform their newly acquired
competitors into major market contenders
• A powerful successful competitive strategy
employed by one company greatly intensifies
the competitive pressures on its rivals to
develop effective strategic responses or be
regulated to also ran status
•