Competitive Intensity Rating
Score the aggression level of your market. Understand if you are in a 'Cold War' or a hot 'Price War' based on volatility metrics.
Market Factors
Market Thermometer
Status: Stable
Competitor Density
10 rivals. Moderate competition.
Algo Activity
4 changes/mo. Manual/Static pricing dominant.
Strategic Advice
Opportunity to capture margin exists.
Execution Steps
Estimate the number of direct competitors.
Input the frequency of price changes you observe per month (volatility).
Enter the average discount depth during promotions.
The Speedometer calculates the 'Market Heat Index'.
Pro Strategy
- If Intensity is High (>70), compete on Brand, Service, or Speed. Competing on Price is suicide unless you have the lowest cost structure.
- If Intensity is Low (<40), you have 'Pricing Power'. You can likely raise prices without immediate retaliation.
- Use this score to explain margin compression to investors or stakeholders.
Core Concepts
Market Volatility
How often prices change. High volatility (e.g. Amazon hourly updates) indicates algorithmic dominance and low margins.
Discount Depth
Deep discounts (>30%) indicate a 'race to the bottom' mentality or oversupply in the market.
Saturation
A high number of competitors usually correlates with lower margins, as products become commoditized.
What is Competitive Intensity Rating?
The Intensity Rating aggregates three key signals of market aggression: Crowding (Competitor Count), Volatility (Frequency of Change), and Desperation (Discount Depth). It normalizes these inputs into a 0-100 index.
Best For
- • Entering a new market (Go/No-Go decision).
- • Setting quarterly strategy (Defend vs Attack).
- • Explaining churn or margin erosion.
Limitations
- • Inputs are estimates.
- • Does not measure non-price aggression (e.g. Ad Spend).
- • Snapshot in time.
Alternative Methods
Porter's Five Forces
A broader strategic framework including suppliers/buyers power.
Reaction Simulator
Predicting specific competitor moves.
Industry Applications
See how this methodology generates real revenue uplift in different sectors.
Phone Accessories
Entering the iPhone Case market.
Intensity Score was 95 (100+ competitors, daily price changes, 50% discounts).
Enterprise Software
Legacy market with 3 big players.
Intensity Score 30 (Few players, stable prices).