Factors influencing intensity of competition in the Czech dairy industry

Abstract

The paper is a part of solution of the research plan of the FBE MUAF in Brno, No. GAMSM 431100007, and it is focused on analysis of factors influencing intensity of competition fight among the existing firms in the Czech dairy industry – describing their actual situation and their possible development in the future relating to the expected integration of the Czech Republic into the European Union. All analysed factors are important and significantly intensify competition fight among the existing firms in the industry. The level of concentration is low – 16% of businesses in the industry control 60% of market, but almost 30% of businesses in the industry have only 3% share in the market, growth of the industry is slow – about 5% annually, and barriers of exit from the industry are significant. Situation of the next four factors (level of fixed and storage costs, product differentiation and switching costs, size of capacity augmentation, diversity of competitors) is similar.