Sources and Entrance of new competitors

Here are some useful information about new competitors

The most common sources of new competitors are:

• Companies competing in a related product/market
• Companies using related technologies
• Companies already targeting your prime market segment but with unrelated products
• Companies from other geographical areas and with similar products
• New start-up companies organized by former employees and/or managers of existing companies

The entrance of new competitors is likely when:

• There are high profit margins in the industry
• There is unmet demand (insufficient supply) in the industry
• There are no major barriers to entry
• There is future growth potential
• Competitive rivalry is not intense