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| Topic: |
Business
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| Number of pages / Number of words: |
2 / 556 |
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Compare this with designer clothes, where if the price goes up you can always buy low priced jeans instead. For those of us who are economics students, this is also called elasticity of demand.
5. Competitive rivalry
This is how competitive an industry is. For instance, if there are lots of companies selling essentially the same products there will always end up being a price war which will severely hurt the company' profits...
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The wireless companies have had this problem for years and fierce competition has made it tough for them to make a profit.
Porter's five forces is one of the key concepts taught in business schools today. Understanding this is important in order to understand the duration of competitive advantages.
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