Investing in companies with a competitive edge. Part 5: Rivalry among existing companies
Tim Richardson
Pengana Capital Group.
In the final installment of Harding Loevners Porter's Five Forces series, Director of Research Yoko Sakai looks at the rivalry and competition between existing businesses in an industry.
The intensity of this force can be influenced by many factors, such as the maturity of the industry, price competitiveness, product or service differentiation, and more. The more rivalry within an industry, the harder it will be for a company to achieve profitable growth.
In growing markets, competition is mild as companies focus on meeting demand, while in mature markets, intense competition leads to price wars and shrinking profits. Product differentiation, exemplified by Apple's iPhone, helps maintain premium pricing and customer loyalty. However, markets with little differentiation, like iPhone casing suppliers, face fierce competition.
If you missed any of our Porter's Five Forces updates you can access the full series here: (VIEW LINK)
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