The intensity of competitive rivalry
In the traditional economic model, competition among rival firms drives profits to zero. Butcompetition is not perfect and firms are not unsophisticated passive price takers. Rather, firmsstrive for a competitive advantage over their rivals. The intensity of rivalry among firmsvariesacross industries, and strategic analysts are interested in these differences. For most industries,the intensity of competitive rivalry is the major determinant of the competitiveness of theindustry.The intensity of rivalry is
influenced by the following industry characteristics:
•A larger number of firms, slow market growth, high fixed costs