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Competitive rivalry

For most industries, the intensity of competitive rivalry is the major determinant of the competitiveness of the industry. Having an understanding of industry rivals is vital to successfully marketing a product. Positioning pertains to how the public perceives a product and distinguishes it from competitors‘. An organization must be aware of its competitors’ marketing strategies and pricing and also be reactive to any changes made. Rivalry among competitors tends to be cutthroat and industry profitability low while having the potential factors below:

Potential factors:

  • Sustainable competitive advantage through innovation
  • Competition between online and offline organizations
  • Level of advertising expense
  • Powerful competitive strategy which could potentially be realized by adhering to Porter‘s work on low cost versus differentiation.
  • Firm concentration ratio