Final answer:
Two factors used in competitor analysis are the similarity of resources and market commonality. These help determine how similar competitors are in their assets and their pursuit of the same customers. Tools like the four-firm concentration ratio and Herfindahl-Hirschman index measure market concentration, but may not always reflect the real competitive environment due to underlying assumptions.
Step-by-step explanation:
Two factors commonly used in competitor analysis, such as among hotels in Manhattan, are the similarity of resources and market commonality. Market commonality refers to the degree to which different competitors are vying for the same customers in the same markets. Another vital element is the similarity of resources, which indicates how comparable the firms are in terms of the assets and capabilities they bring to the competition.
Competitor analysis helps firms to identify both obvious and subtle similarities and differences between them and their rivals. This is important since the markets may be similar in terms of elasticity of demand, a firm's ability to make long-run profits, and determining the profit maximizing quantity condition.
Assessment tools such as the four-firm concentration ratio and the Herfindahl-Hirschman index have been traditionally used to evaluate market concentration and competition. However, they may not always accurately reflect competitive dynamics due to assumptions about market definition and comparability across industries. Antitrust regulators are adapting their approaches to these complexities.