Intensity of Rivalry Framework
Understanding rivalry among competitors
The Intensity of Rivalry Framework describes the factors that influence the intensity of rivalry among competitors in an industry. The framework suggests that the intensity of rivalry is influenced by factors such as the number of competitors, the balance of competitors, and the rate of industry growth.
- The intensity of rivalry is influenced by factors such as the number of competitors, the balance of competitors, and the rate of industry growth.
- Firms can use the Intensity of Rivalry Framework to understand and navigate rivalry among competitors.
- The intensity of rivalry can have a significant impact on a firm's profitability and market share.
- Assess the number of competitorsFirms should assess the number of competitors in their industry and understand how this influences the intensity of rivalry.Pro tipConsider the potential impact of new entrants on the intensity of rivalry.WarningFailing to assess the number of competitors can lead to incorrect strategic decisions.
- Evaluate the balance of competitorsFirms should evaluate the balance of competitors in their industry and understand how this influences the intensity of rivalry.Pro tipConsider the potential impact of changes in the balance of competitors on the intensity of rivalry.WarningFailing to evaluate the balance of competitors can lead to incorrect strategic decisions.
The airline industry
The airline industry is characterized by high intensity of rivalry due to the large number of competitors and the low barriers to entry.
OutcomeThe high intensity of rivalry in the airline industry has led to reduced profitability and increased competition among firms.
Failing to assess the number of competitors
Failing to assess the number of competitors can lead to incorrect strategic decisions. Firms should consider the potential impact of new entrants on the intensity of rivalry.
Not evaluating the balance of competitors
Failing to evaluate the balance of competitors can lead to incorrect strategic decisions. Firms should consider the potential impact of changes in the balance of competitors on the intensity of rivalry.
The concept of intensity of rivalry was developed by Michael E. Porter as a way to understand the dynamics of industry competition and the strategies that firms can use to maintain their market position.
Source · BOOK
Competitive Strategy