Final answer:
Rivalries in the business sector can lead to building a larger fan base and revenue, fostering increased competition and innovation. These markets dynamics can result in a company achieving temporary competitive advantage and capture above-normal profits, which is a key consideration for policymakers in terms of market regulation.
Step-by-step explanation:
Rivalries within industries can serve as catalysts for larger phenomena in the business world. Answering the question, rivalries lead to building a larger fan base and revenue, and eventually lead to increased competition and innovation. This process creates a dynamic environment that can both foster the growth of individual businesses and reshape the market structure. Heightened competition can incentivize firms to become more innovative, seeking new technologies or unique selling points that differentiate them from their rivals. The process of innovating can lead to the company securing a temporary competitive advantage, allowing the opportunity to capture above-normal profits before the competition catches up.
As seen in the technology sector with companies like Microsoft and Amazon dominating certain market segments, these rivalries can solidify a company's market dominance but can also encourage new entrants to innovate, leading to a constantly evolving market landscape. For policymakers, understanding the influence of rivalries on market size is crucial for fostering a competitive yet fair business ecosystem.