Introduction
Competitive rivalry can be defined as constant actions and responses that are competitive and comes about between the competing firms. It brings about influence on the capability of the individual firm to acquire and maintain competitive advantages.
Competitive rivalry
The point from which to start carrying out an analysis of the industry is trying to consider competitive rivalry. In the case where it is found that there is easy entry in the industry, then this implies that there is a high likelihood of having big competitive rivalry. More so, in the case where there is ease in the customers’ shifting to the products that are substitutes of the existing product in the market, then there is still an implication that rivalry in competition will be on the rise.
There are several difficulties associated with predicting competitive rivalry. For instance, the competitive actions of a firm have effects on its competitors that are noticeable and these actions elicit competitive responses from the competitors. The competitive actions and responses are felt among the competitors.
A firm seeking to win a competitive advantage over its rivals (by deciding to become the first or second mover) may respond by undertaking several moves. One of the moves is to change the prices of its product(s). It raises or brings down its prices to achieve an advantage.
More so, the firm can choose to bring about differentiating its products in order to make the products look different. Another way a firm can win a competitive advantage is by utilizing the distribution channels in a more creative way. This implies that a firm has to come up with unique distribution channels in the industry. The firm can also decide to carry out the exploitation of relationships with its suppliers. For instance, it can decide to set quality standards that are high and require the suppliers to comply with its demands for the requirements of the products as well as price (QuickMBA 7).
Microsoft-Yahoo! Merger (Yahoo and Bing)
According to Anon. (Microsoft and Yahoo! Merger: Good or Bad? 1), Yahoo and Microsoft have come up with a decision to combine forces to form a partnership in advertisement and internet search that basically targets to win the competition over Google that is the market leader. This combination of forces will have to involve the selling out by Yahoo! “pay-per-click advertisement on the websites of Yahoo and Microsoft which is anticipated to bring up income and the competition between the two will not have to exist anymore. The merging of the two companies gives an implication of additional rivalry to the online advertisement and the market of search engines.
It is anticipated, by Microsoft, that the merging will provide the company with the enormity and perception it requires to get more users of the search engine, more customers that carry out advertisement and then eventually more income.
Conclusion
However, considering bringing about improvement in the system of the search engine, Google is ahead of both Yahoo and Microsoft in terms of the knowledge about what can work and what cannot (Corbel 10). Still, Microsoft seems to be a great threat especially putting into consideration that it has a lot of money to invest in the technology of advertising and search engine. Another reason why it is a major threat is that the growth that will have to come in the future is dependent on the merger they are having with Yahoo.
Works Cited
Anon. “Microsoft and Yahoo! Merger: Good or Bad?” 2009. Web.
Corbel, Terry. “Tech Drama: How Microsoft-Yahoo Can Beat Google”. The Biz Coach, 2010. Web.
QuickMBA. “Porter’s Five Forces: A model for industry analysis.” quickmba, 2007. Web.