How would you determine the level of competitive intensity in an industry
Sample Answer
- Number and size of competitors: The more competitors there are in an industry, the more intense the competition is likely to be. This is because each competitor is trying to gain market share from the others.
- Degree of product differentiation: If products in an industry are highly differentiated, then competition is likely to be less intense. This is because customers are more likely to be loyal to a particular brand or product, and they are less likely to switch to a competitor’s product.