Firms competing in an industry are vital to determine the profitability of a
business. The more intense the rivalry among these competing firms, the more threat it will
create to profitability likewise lesser the intense of rivalry lesser the threat will be. Many
factors influence the intensity of rivalry among firms in an industry. In general the number and
size of the rival firms, demand growth of industry product or service, amount of fixed costs and
exit barriers are the forces behind the intensity of rivalry in an industry. The objective of this
study is to develop a framework based on these influential factors that will be able to determine
the level of intensity of rivalry in an industry. This will enable the firm to pin point the scale of
threat from the rivals and thus will help to prepare aptly for the strategic battle.
