Factors influencing local competition intensity

Abstract

This paper investigates the factors influencing the intensity of local competition. The research results may be of interest to companies if deciding whether to enter a market or by defining a new market. Understanding which factors impact the competition the most also helps to address these factors when dealing with competitors and other subjects. The studied factors were selected based on Porter's model of five competitive forces. The data were obtained from the World Economic Forum database. To analyze the data, the statistics software PSPP and the programming language Python with statistical package Statsmodels were used. The results were considered to be statistically significant if they were on significance level p ≤ 0.05. The finding is that higher competition intensity is positively influenced by the number of local suppliers, foreign competition, intellectual property protection, and negatively by spending on research and development. This research may serve as a guideline for companies. If a company is entering a new market, the results presented in this paper may help to assess the intensity level of local competition by identifying the most influential factors.