Final answer:
The intensity of competition in industries is influenced by factors like industry growth rate, learning economies, and product differentiation; with evidence of this competition including aggressive pricing strategies. Technology and airline sectors are examples of highly competitive industries.
Step-by-step explanation:
The intensity of competition among firms can be related to several factors, including the industry growth rate, learning economies, and the degree of differentiation in products and services. When considering the industry growth rate, competitive intensity can vary. In a fast-growing industry, competition might be less intense as firms can grow without taking market share away from each other. Conversely, in a stagnant or declining industry, competition tends to be fierce as firms fight for a greater share of a shrinking market.
Learning economies, also known as economies of scale, play a role in shaping the competitive landscape. As firms increase production, they learn to do it more efficiently, and their average cost of production declines, giving them a competitive advantage. Moreover, a large degree of differentiation in products and services can mitigate the intensity of competition, as firms are able to target different customer segments and reduce direct rivalry.
Evidence of serious competition in an industry may include aggressive price cuts, innovation races, and high marketing expenses. Two industries known for high levels of competition are the technology sector, where rapid innovation and product development occur, and the airline industry, which contends with price wars and brand loyalty challenges.