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These 5 forces determine the competitive intensity and therefore attractiveness of a market.
? FORCE 1: THE THREAT OF ENTRY
"Average profitability is influenced by both potential and existing competitors". The more profitable is a market or industry yielding supernatural profits, the more this markets will draw firms to entry in order to gain market share and take a piece of the cake. The result of this many entrant is an increase of the competition level and consequently a reduction of industry?s profit margin. Therefore, the key concept which allows incumbents firms to block entries on the already profitable industry is the entry barriers...
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