Porter's 5 Forces: Rivalry of Existing Firms

Michael Porter identified the rivalry among existing firms in an industry as one of the 5 forces that affects the competitiveness (and thus profitability) of an industry. The more intense the rivalry, the less likely that firms in the industry will be able to achieve a high level of profitability.

Rivalry may take the form of price wars, attack advertising, introductions of competing products, and increased warranties or levels of service. Rivalry is likely to be most intense when the industry has many firms, there is little or no product differentiation, and the industry is characterized by slow growth, high fixed costs, and high exit barriers.

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