Porter (1980) reiterated that intensity of rivalry is dependent on number and size of direct
competitors as numerous and/or equally balanced competitors may lead to intense competition. This is
because business growth sought is greater than rate of growth of the industry. The rivalry for market share
becomes intense when product differentiation and switching costs are low. Rivalry becomes more intense
in fixed costs particularly in high preservation/carrying cost industries such as the Hotel Industry in most
metropolitan cities. There are strong pressures to sell capacity by price-cutting except weekends and
holiday seasons. Capacity augmentation exists as large additions to capacity can disrupt the demand and
supply balance and leads to intense rivalry. Exit barriers happen due to economic, strategic and economic
factors which retain competitors in an industry. Despite low or negative profitability and diversity,
companies and industries may have different origins, goals and strategies and an overlap in target
customers.