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Rivalry in the industry can be weak, with few competitors that don't compete very aggressively. Or it can be intense, with many competitors fighting in a cut-throat environment.
Factors affecting the intensity of rivalry are:
Number of firms ? more firms will lead to increased competition.
Fixed costs ? with high fixed costs as a percentage of total cost, companies must sell more products to cover those costs, increasing market competition.
Product differentiation ? Products that are relatively the same will compete based on price. Brand identification can reduce rivalry.
One of the defining characteristics of competitive advantage is the industry's barrier to entry...
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