Final answer:
Rivalry among existing firms in Porter's Five Forces framework can decrease industry profitability.
Step-by-step explanation:
In Porter's Five Forces framework, rivalry among existing firms can impact industry profitability. Rivalry refers to the competition between firms in the same industry. When there is intense rivalry, it often leads to price wars, increased marketing expenses, and a decrease in overall profitability.
For example, let's consider the smartphone industry. Several companies, such as Apple, Samsung, and Huawei, compete fiercely with each other. They constantly release new models, offer discounts, and invest heavily in marketing to attract customers. This intense rivalry puts pressure on profit margins and can negatively impact industry profitability.
Therefore, the correct answer to your question is b) Decreases industry profitability.