Porter's Five Forces Analysis

Competitive Rivalry. What is it?

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

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 M&A landscape look like? Are competitors getting stronger through mergers?

Are there global opportunities or threats?

Who are the Competitors?

Research the Competition: Measuring Market Share

Research the Competitive Environment: Measuring Sales Growth

Research the Competitive Environment: M&A Landscape

Research the Competitive Environment: Global Conditions