Developing Strategy through External Analysis
Completion requirements
Read this section to learn the difference between internal and external forces and how they affect organizations. Attempt the exercises at the end of the section.
Porter's Five-Forces Analysis of Market Structure
Rivalry
This measures the degree of competition between existing firms. The higher the degree of rivalry, the more difficult it is for existing firms to generate high profits. The most prominent factors that experience shows to affect the intensity of firms' rivalries are (1) numerous competitors, (2) slow industry growth, (3) high fixed costs, (4) lack of differentiation, (5) high strategic stakes and (6) high exit barriers.