What are the factors affecting the intensity of rivalry in the industry in which your company is competing? Use Figure 3.7 and the accompanying discussion to help you in pinpointing the specific factors most affecting competitive intensity. Would you characterize the rivalry and jockeying for better market position, increased sales, and market share among the companies in your industry as fierce, very strong, strong, moderate, or relatively weak? Why?

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FIGURE 3.7 Suppliers Factors Affecting the Strength of Competitive Rivalry Typical "Weapons" for Battling Rivals and Attracting Buyers Lower prices More or different features Better product performance Higher quality Stronger brand image Wider selection of models Bigger/better dealer network Low-interest-rate financing Higher levels of advertising Better customer service Product customization Substitutes Rivalry among Competing Sellers How strong is seller-related competition? Rivalry is generally stronger when: Diversity of competitors increases in terms of long-term directions, objectives, strategies, and countries of origin. Buyer demand is growing slowly. Buyer demand falls off and sellers find themselves with excess capacity and/or inventory. The number of rivals increases and rivals are of roughly equal size and competitive capability. The products of rival sellers are commodities or else weakly differentiated. Buyer costs to switch brands are low. High exit barriers keep unprofitable firms from leaving the industry. Rivalry is generally weaker when: Buyer demand is growing rapidly. The products of rival sellers are strongly differentiated and customer loyalty is high. Buyer costs to switch brands are high. New Entrants Buyers