The two factors that determine the extent to which firms will be in direct competition with each other are market commonality and resource similarity

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Market commonality refers to the degree to which two firms operate in the same market with similar products or services, while resource similarity refers to the degree to which the two firms possess comparable resources or capabilities that are valuable, rare, and difficult to imitate. The higher the market commonality and resource similarity, the more likely the firms will be in direct competition with each other.

The Two Factors That Determine the Extent to Which Firms