This allows for the emergence of agencies that attempt to facilitate the relationship between medical aids and providers of services. Rivalry determinants Psychologists have to deal with the rivalry seen in any profession, but the concentration and lack of diversity of individuals within the profession may aggravate competition. Because barriers to entry have been high in the past, psychologists may have difficulty in exiting the profession, reducing the fluxes often seen in other professions e.g. accounting. The democratisation of knowledge through the Internet may also indicate another potential substitute, especially because it may offer a cost-effective alternative for people wanting psychological information. In an industry that is having to redefine itself because of possible lower barriers to entry, emerging managed care, a potential influx of new entrants, attractive substitutes and more cost conscious consumers, the strategic position that a practitioner adopts may have as much to do with success as skill.
Porter goes on to say there are four generic strategies that can be adopted by firms.
They can compete on the basis of either cost or specialisation and, at the same time, they either align themselves to cater for a broad bandwidth of people or a very narrow segment of people with particular needs. Provided that they choose different generic strategies, a number of firms can do very well in the same industry. A low cost strategy must begin with a good product, although it may not have some of the special features of competitors' products or services. Successful cost competitors are often successful because they are able to signal the merit in their product that leads to low cost. A differentiated strategy starts with being unique in some way.