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Slow industry growth can lead to intense competition for market share. When the growth of an industry is slow, companies within that industry may find it difficult to expand their business and increase their profits through the acquisition of new customers or markets. As a result, they may focus their efforts on trying to take customers from their competitors, leading to increased competition. This can result in aggressive marketing strategies, price wars, and other competitive behaviors.
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How do you out-perform competitors and acquire a better understanding of key profitability drivers in your industry? This book, by the legendary Micha...
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Many or equally balanced competitors: Large number of firms increases the possibility of a firm's erratic behavior triggering competitive warfare. In an industry dominated by a few firms, the leaders can impose discipline and create coordination. Slow industry growth: Slow growth can set off intense competition for market share. High fixed or storage costs: High fixed costs create intense competition. Lack of differentiation: When the products are seen as undifferentiated commodities, it creates severe price and service competition. Product differentiation reduces competition as buyers have brand preferences. Diversity of competitors: Diverse firms have different strategic goals and tactics, making it hard to arrive at standard ""rules of the game"" for the industry. High strategic stakes: Some firms may consider achieving success in an industry to be strategically important, even at the cost of profitability. This can fuel intense competition. High exit barriers: High exit barriers,...
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