Hostile relationships among the enterprises involved in similar business is the most easy to understand in competition. This hostile relationships become further severe when following conditions are prevailing.
· Either there are more number of enterprises involved in similar business or the companies with almost the same scale are competing against each other.
· Slow growth in the industry.
· Higher fixed or inventory costs.
· No distinction on the basis of product.
· It does not require such switching cost for changing the customer.
· It is not possible to increase the supply capability bit-by-bit.
· The strategy adopted by the different competitors is diversified.
· The results are very high once the success is achieved.
· Barrier against withdrawal is very big.
· The major barriers against withdrawal are listed below:
· Sunk cost (an investment which has been made in the past and is not possible to recover).
· Fixed cost for withdrawal.
· Restrictions from the Government or society.
· Sentimental barriers.
· Strategic inconveniences, which results in bad relation with the other operation division.
· Either there are more number of enterprises involved in similar business or the companies with almost the same scale are competing against each other.
· Slow growth in the industry.
· Higher fixed or inventory costs.
· No distinction on the basis of product.
· It does not require such switching cost for changing the customer.
· It is not possible to increase the supply capability bit-by-bit.
· The strategy adopted by the different competitors is diversified.
· The results are very high once the success is achieved.
· Barrier against withdrawal is very big.
· The major barriers against withdrawal are listed below:
· Sunk cost (an investment which has been made in the past and is not possible to recover).
· Fixed cost for withdrawal.
· Restrictions from the Government or society.
· Sentimental barriers.
· Strategic inconveniences, which results in bad relation with the other operation division.