Comment on the role of buyers and sellers in the context of Industry Rivalry.

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Expert Solution

Industrial Rivalry refers to the intensity with which firms within an industry exert pressure on each other to reduce the potential profits or gains made by others . It measures the competitiveness within an industry . As the number of firms increases , the rivalry to get more and more market share also rises between them . Industrial rivalry usually leads firms to produce best quality products at the cheapest since that is the most appealing way to capture the market .

Buyers can pressurize firms by switching over to substitute goods , so that firms are forced to provide good quality products in order to maintain the rivalry . Sellers can also sell goods of that firm only that offers the best price . Thus buyers and seller's attitude towards demand of goods can accentuate the rivalry between firms . In order to satisfy consumer needs and gain a large chunk of market share the firms fight constantly to produce best product at lowest price .

Rahul Sunny answered 1 year ago

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