The extent of rivalry among established companies is a function of an industry's competitive structure, demand conditions, and barriers to exit. Discuss.

Due to the current tr fire of globalization, industries of all sectors are becoming more(prenominal) than and more war-ridden. Rivalry between firms is determined by the industries´ competitive structure which again is determined by globalization and the incident that leading economies are stagnating or show very smaller growth. This reflects on consumer expenditure as the end consumer is left with less(prenominal) money to spend, thus affecting choices made and at the end of the day also effecting firms who are confronted with a weaker demand condition.

An industriousness like the airline industriousness serves as a slap-up example as to how intensive competition can evolve; Especially in Europe, which has seen a rapid growth in the low cost carrier sector, established airlines are vox populi the competition of these low cost carriers. Exit barriers in this industry are high, as high investments are needed to set out up an airline company. Also the fact that a exceedingly specialised infrastructure within the company has to be created makes it ticklish for an exit from this industry. Mostly when a company is doing badly in this sector, it either results in bankruptcy (see Swissair in 2002) or takeovers against a symbolic fee (Deutsche BA takeover by German textile magnate H.R.



Wöhrl in 2002 against 1 from British Airways, who judge to get a 25% share of profits until 2006 and go away support the operation till then with 35Mio. ) . Especially the piece example shows how difficult it is to exit from this industry and that firms are steady willing to hand over management to someone else much for free and even support the operation for a current of time rather than exiting completely from the business, by which even more costs would be incurred.

The Deutsche BA which had been founded in 1992 as a daughter airline...

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