What factors lead rivalry among the firms?

Rivalry among existing firms

The competition among firms is a free economy syndrome it may be highly competitive or may be rival in nature. Following factors may have lead to high competition or rivalry among firms.

• Equally balanced competitors,
• Product capacity,
• Size of the firm
• Slow industry growth, that is demand growth is slow,
• High fixed cost,
• Lack of differentiated products and low or no switching cost,
• High strategic stacks,
• Large increase in manufacturing capacity,
• High exit barriers,
• Economic strategy and emotion,
• Diversity of competitors intensified competition,
• Merger or holding company has already been done in the industry.

So the above mentioned factors may lead the firms to form a rivalry among themselves.