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Important Tips of Rivalry Strategy in Microeconomics

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Important Tips of Rivalry Strategy in Microeconomics

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  1. Important Tips of Rivalry Strategy in Microeconomics

  2. Factors Influencing Rivalry The costs improve the rivalry consisting of high level of fixed costs, significant storage expenses, along with low level of switching costs. There is significant fixed costs which motivate the firms to decrease the price. With the fall in price, there will be severe competition.

  3. Influence of Competition on Consumers As the competition is healthy, the consumers could obtain the right  value for money and it may not affect it. The competition motivates companies to get involved in production capacity, decrease the costs and improve the efficiency.

  4. Causes Behind Significant Rivalry There is rise in the number of the competitors Low cost of switching Service which maintains standard Reduction in price along with  competitive weapons Significant Investment Economics of Scale

  5. Porters Five Forces Porter's 5 Forces involves the analytical model assisting the marketers along with business managers who check the 'balance of power' within market between various organizations at international level. They conduct an analysis of attractiveness for possible profitability in industry.

  6. Analysis of Company with Porter’s Five Forces In order to state the strategy, we conduct an analysis of the company in connection with Porter's Five Forces. There are certain threats in new entry. It is important to take into consideration others who entered the market and become a threat to the position of company. Substitution threat Power of bargaining with suppliers. Power of bargaining with buyers. Competitive rivalries.

  7. High Rivalry Intensity Intensity of Rivalry has been high for the following reasons: A large number of competitors Growth in industry is slow. High Fixed costs. Equal size competitors. Undifferentiated products. Small Brand loyalty. Low cost of switching consumer. Competitors possess same market share.

  8. Porter Diamond PorterDiamond represents Porter Diamond Theory of the National Advantage. This is the modelwhich had been created to assist competitive advantage where the nations have some factors present. They are going to share the nature of governments who work as the catalyst to enhance the condition of country.

  9. Understanding Attractiveness of Industry Strength of the Buyers. The buyers have a significant effect over the profitability of industry. Strength of Suppliers. Supplier power had an inverse relationship with the profitability of industry. Danger of the substitutes Level of Rivalry. Danger of the new entrants

  10. Calculation of Opportunities in Market  There is a calculation of opportunities in marketpresenting the organization. We find an acknowledgment in different factors of market. It consists of growth rate along with marketsize and factorslike access to the raw materials,  industry capacity and competition.

  11. Factors Influencing Market Attractiveness Size of market. Growth in Market. Trend in pricing. Level of competition. Total industrial risk. Chance to discriminate services and products.

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