Final answer:
The nature of rivalry among existing firms in Porter's Five Forces is intense competition, where firms strive for market dominance through strategic decisions. The degree of rivalry can vary between monopolistic competition and oligopoly, reflecting either many competing firms or a few dominant ones.
Step-by-step explanation:
The nature of rivalry among existing firms in Porter's Five Forces is best described as intense competition. This is reflective of how firms in the same industry vie for market share, customer base, and profitability. It often involves strategic business decisions related to pricing, product development, marketing campaigns, and operational efficiency. In markets characterized by monopolistic competition, many firms compete by selling similar but differentiated products, leading to a significant amount of competition. Conversely, in an oligopoly, a few large firms dominate the market, which can lead to a dichotomy of behaviors where the firms may opt to collaborate, much like a cartel, or compete intensely against each other.
In the context of evidence of serious competition, one might look for aggressive price cuts, increased marketing efforts, or introduction of new and improved products. Highly competitive industries include the technology sector, where firms are continuously innovating, and the airline industry, where service and price battles are common.