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Industry Rivalry

Number of Competitors: A high number of competitors leads to high competitive pressure. According to macroeconomic theory, a high number of competitors cause nearly produced at marginal costs and profits are low
Industry growth: The competition in fast-growing industries is often lower than in slow growing or even declining industries, because as an extension of their own sales without having market share with competitors
Over-capacity / utilization: If the total capacity demand significantly, then the provider struggles to achieve high utilization. This leads to price pressure and thus declining industry attractiveness
The proportion of fixed costs in total costs: With high fixed proportions, there is a strong incentive to achieve high utilization, to cover at least a portion of fixed costs. Due to the high pressure of supply, prices fall often almost to the level of the variable costs
Exit barriers: The exit of competitors from the market is often necessary to reduce excess capacity. This approach is hampered or delayed if high-conversion or decommissioning costs occur, the business area for the competitors concerned, for strategic reasons, or investments in the past lead to an (irrational) binding to the division ("sunk costs")
Product differentiation: The offers of the competitors differ significantly, the interchangeability of products / services, thereby weakened the price pressure drops

Industry Rivalry

	Created by Sandra Reed over 9 years ago