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Rivalry between competitors

RIVALRY BETWEEN COMPETITORS

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Rivalry between competitors is the interaction and competition between firms operating in the same market or sector. This rivalry This is because companies compete for the same customers and resources, and seek to gain market share and increase their profits. Rivalry between competitors is one of the 5 forces of porter analysis (ver+). The intensity of rivalry between competitors may vary according to various factors, such as the number of firms operating in the market, the degree of differentiation of products and services, the size of the firms, barriers to market entry, among others.

When rivalry between competitors is high, this can lead to price wars, increased advertising and promotions to attract customers, product and service innovation, quality improvement, geographic expansion and increased online presence. All of these can lead to reduced profit margins and increased pressure on companies to maintain their market position. On the other hand, chen rivalry between competitors is low, firms may have greater stability and profitability, but there may also be less incentive to innovate and improve the quality of products and services. Therefore, it is important for entrepreneurs to take into account the level of rivalry between competitors when entering a market, and to develop strategies that allow them to compete effectively and differentiate themselves from their competitors.

Recommendations for an entrepreneur to analyse the rivalry of competitors in the sector where he/she wishes to enter.

If an entrepreneur wishes to enter a sector, it is essential that he analyses the rivalry between competitors in that sector, as this can significantly affect the success or failure of his business. 

Here are some recommendations for analysing the rivalry of competitors in a sector:

  1. Identify the main competitors: identifies the main competitors in the sector and analyses their market position, size, market share, strengths and weaknesses.
  2. Analyse market concentration: check whether the sector is dominated by a few large companies or whether there is a wide variety of competitors in the market.
  3. Analyse barriers to entry (see+ TIP): investigates whether there are significant barriers to entry for new businesses, such as high entry costs or government regulations.
  4. Assess the threat of new competitors: investigates whether new firms are entering the market and whether they have a competitive advantage over existing firms.
  5. Analyse the existing rivalry: examine the rivalry between competitors in the sector. Investigate whether there are price wars, mergers and acquisitions, aggressive advertising campaigns, and other factors that could affect your company's success.
  6. Assess the threat of substitute products or services: investigate whether there are substitute products or services that could affect your market position.
  7. Assess the bargaining power of customers and suppliers: investigates whether customers and suppliers have strong bargaining power in the market.

In short, it is important for entrepreneurs to analyse the rivalry of competitors before entering a sector in order to better understand the competitive environment in which they will operate. It is important to analyse the rivalry between competitors before entering a sector because it allows the entrepreneur to understand the dynamics and characteristics of the market in which he/she is going to operate, to identify the main competitors and their strategies, and to assess the level of existing competition. This is essential in order to be able to develop an appropriate and differentiated business strategy to enable the company to succeed and stand out in the market. In addition, competitor rivalry analysis also helps to identify business weaknesses and strengths and to develop action plans to improve and compete effectively in the market.

Is it possible to make money by entering a sector where there is a lot of rivalry between competitors?

Yes, there is money to be made by entering a sector where there is a lot of rivalry between competitors. Although competition may be more intense and profit margins may be lower, there are still opportunities for companies that can offer high quality products or services at competitive prices. In addition, the fact that there is a lot of rivalry in an industry may indicate that there is a high demand for products or services in that market, which can be a good sign for new entrants. The important thing is to make a careful analysis of the rivalry and the strategies of existing competitors, and to develop a clear and sustainable strategy to stand out in the market.

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Picture of Jaime Cavero

Jaime Cavero

Presidente de la Aceleradora mentorDay. Inversor en startups e impulsor de nuevas empresas a través de Dyrecto, DreaperB1 y mentorDay.
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