Full Answer Section

• Barriers to entry: If there are high barriers to entry into an industry, then competition is likely to be less intense. This is because it is more difficult for new entrants to come into the market and compete with established companies.
• Industry growth rate: If an industry is growing rapidly, then competition is likely to be less intense. This is because there is more demand for products in a growing industry, and there is less need for companies to compete on price.
• Cost structure: If the cost structure in an industry is high, then competition is likely to be more intense. This is because companies need to sell more products in order to cover their costs, and they are therefore more likely to compete on price.
• Strategic group rivalry: The level of competitive intensity can also be affected by the strategic group rivalry in an industry. A strategic group is a group of companies that compete in the same market and have similar strategies. If there is a lot of rivalry between strategic groups, then the overall level of competition in the industry is likely to be high.

In addition to these factors, the level of competitive intensity can also be affected by government regulations, the bargaining power of suppliers and buyers, and the threat of substitutes.

The level of competitive intensity in an industry can have a significant impact on the profitability of companies in that industry. When competition is intense, companies need to be very efficient in order to survive. They also need to be innovative in order to differentiate their products from those of their competitors.

The level of competitive intensity can also be used to assess the attractiveness of an industry. Industries with low levels of competition are typically more attractive for businesses because they offer the potential for higher profits.