Page 68 - CL How to Read a Case Study

Industry Competitiveness

Competition: Number, Size and Power

What is important in this area is the number and

capability of industry competitors. If there are many

competitors, and they offer equally attractive products

and services, then it is likely that the firm will have little
power in the industry. The reason is that both suppliers

and buyers will go elsewhere if they don't get a good deal

from a firm. On the other hand, if no other firm can offer

the same level of product or service then the firm will

often have tremendous industry strength.

• number of competitors

• measurable differences

• switching costs

• customer loyalty

• costs of market exit