Intense competition for market share can limit a company's profits when diversifying into a new industry....

 

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Intense competition for market share can limit a company's profits when diversifying into a new industry. Consider these questions as you describe the rivalry in your company's existing industry. . . ■ How many competitors currently supply engines for the automotive manufacturing industry? What is each competitor's position? How much of the market share has each one captured? Do these companies compete intensely in the automotive industry? If so, do they engage in rivalry and lower prices to gain market share? Do companies compete to provide additional services or constant innovation? Intense competition for market share can limit a company's profits when diversifying into a new industry. Consider these questions as you describe the rivalry in your company's existing industry. . . ■ How many competitors currently supply engines for the automotive manufacturing industry? What is each competitor's position? How much of the market share has each one captured? Do these companies compete intensely in the automotive industry? If so, do they engage in rivalry and lower prices to gain market share? Do companies compete to provide additional services or constant innovation?

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Analyzing the intensity of competition in the automotive manufacturing industry involves evaluating ... View the full answer