Factors causing weak rivalry among competing sellers include what?

Weak rivalry among competing sellers is typically indicated by the presence of factors that diminish the intensity of competition in the market. In this context, low buyer switching costs can foster an environment where competition is not as fierce. When buyers can easily switch from one seller to another without incurring significant costs, sellers may feel pressured to keep their prices low or offer improved services. However, this ease of switching often encourages sellers to differentiate their offerings rather than directly compete on price, thereby weakening direct rivalry.

In a case with low buyer switching costs, sellers may be more inclined to focus on brand loyalty and creating unique value propositions that attract customers, rather than engaging in aggressive price wars or excessive competition. This dynamic leads to a more stable market where rivalry is less pronounced as competitors carve out distinct niches in response to consumer preferences.

While factors such as low growth in buyer demand, disproportionate sizes among rival sellers, and low barriers to entry can have diverse impacts on market competition, the key aspect here is how low buyer switching costs specifically relate to the intensity of competitive rivalry. Low switching costs promote differentiation, reducing direct competitive pressure and contributing to a more stable market environment.