The CR indicates the percent of market share held by the four largest firms (CR's for the largest 8, 25, and 50 firms in an industry also are available). The Bureau of Census periodically reports the CR for major Standard Industrial Classifications (SIC's). The Concentration Ratio (CR) is one such measure. The intensity of rivalry among firms varies across industries, and strategic analysts are interested in these differences.Įconomists measure rivalry by indicators of industry concentration. Rather, firms strive for a competitive advantage over their rivals. But competition is not perfect and firms are not unsophisticated passive price takers. In the traditional economic model, competition among rival firms drives profits to zero. Impact of inputs on cost or differentiationĬost relative to total purchases in industry
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