The intensity of competition in an industry is influenced primarily by:

The intensity of competition within an industry arises from a combination of various factors, and option D encapsulates the idea that multiple elements contribute to this competitive landscape.

The number of firms in a strategic group directly affects competitive dynamics. When there are many firms within a group, competition can become fierce as companies vie for market share, leading to price wars and increased marketing efforts.

Bargaining power of customers and suppliers also plays a significant role. When customers have strong bargaining power, they can demand lower prices, higher quality, or more services, which can compress margins and intensify competition. Similarly, if suppliers hold significant power, they can influence costs and availability, impacting competitive strategies.

The presence of substitute products introduces another dimension of competition. If consumers can easily switch to alternatives that meet their needs, firms must innovate and improve their offerings continually to retain their customer base. This threat from substitutes can put pressure on pricing and profitability.

Thus, all these factors – the number of firms in a strategic group, bargaining power of customers and suppliers, and the presence of substitute products – collectively shape the intensity of competition in an industry, making option D the most comprehensive and correct answer.