What are the four key factors to competitive rivalry?

The choice that identifies the four key factors to competitive rivalry is grounded in Michael Porter's Five Forces framework, which analyzes the competitive environment in an industry. The correct answer includes the threat of entry, buying power, threat of substitutes, and supplier power.

Understanding these factors is essential for evaluating the intensity of competition within a market:

• The threat of entry considers how easy or difficult it is for new competitors to enter the market. High barriers to entry can protect established companies from new competition, influencing overall rivalry.

• Buying power refers to the influence that customers have over the pricing and quality of goods and services. When customers have significant power, they can drive prices down, increasing competitive pressure on firms within the industry to improve product offerings and reduce costs.

• The threat of substitutes is concerned with the likelihood that customers will switch to alternative products or services that fulfill similar needs. A high threat of substitutes forces companies to constantly innovate and improve their offerings to maintain market share.

• Supplier power reflects the control that suppliers have over the price of goods and services. If suppliers are strong, they can dictate terms and increase input costs, which in turn can affect competition among firms in the industry.

These factors collectively shape