There are a variety of different factors that determine competitive rivalry: multiple equally balanced competitors, slow industry growth, high fixed costs, lack of differentiation, capacity increases, diverse competitors, high strategic stakes and high exit barriers. The model also allows businesses to improve their profitability by giving them more information on: the number of competitors, the power of their competitors, potential new market entrants, the suppliers, the customers, and possible substitute products.Ĭompetitive rivalry focuses on the intensity of the competition within an industry. Using the five forces allows companies to analyze their competitive environment to come up with a strategy to improve their competitive advantage. The model helps business professionals determine an industry’s weaknesses and strengths.
Porter’s Five Forces is a model made up of 5 parts Competitive Rivalry, Supplier Power, Buyer Power, Threat of Substitution, and Threat of Entry.
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