It is almost impossible to address the idea of outgroups without first introducing ingroups. Ingroups are groups of people who you feel personal loyalty and respect for. You generally feel this way about these people because you are part of the ingroup. Biases develop in favor of people in these groups as opposed to people who are not “part of the group”.
People outside of the ingroup are called the outgroup. Generally, the ingroup feels anger towards the ougroups and wants to engage in competitive situations with them. People who are in the ingroup are favored over the outgroup. Ingroups do not actually have to have any power or social status to be a group. It could be as simple as a group of people who all wear the same style of jeans feeling competitive with people who wear skirts.
Example: By the end of the company softball game, friendly rivalry had escalated into fierce conflict between the two teams.