Under Porters Five Forces, what does it mean to have competition in the industry?
Competition in the industry refers to a firm’s total amount of competitors and their ability to capture market share. Generally, the larger the amount of competition, in addition to the amount of equivalent products and services being offered, the lesser the power a firm will have.
Suppliers and customers will generally seek out a company’s competition if they are able to offer a better deal or discounted prices. Conversely, when competition is low, a company will have greater power to charge higher price points and set the terms of the deal with suppliers to achieve higher sales and profits.
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