Definition
Economic, procedural, regulatory, or technological factors that obstruct or restrict entry of new firms into an industry or market. Such barriers may take the form of (1) clear product differentiation, necessitating heavy advertising expenditure to introduce new products, (2) economies of scale, necessitating heavy investment in large plants to achieve competitive pricing, (3) restricted access to distribution channels, (4) collusion on pricing and other restrictive trade practices (such as full-line forcing) by the producers or suppliers, (5) well established brands, or (6) fierce competition. Barriers to exit, paradoxically, also serve as barriers to entry because they make it difficult to cut one's losses and run. Also called barriers to competition, entry barriers, or market entry barriers.
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Barriers to Entry
Very, very few businesses have barriers to entry. As wonderful and as complex as the products of these companies are, they are in industries that almost never have any barrier to entry -- especially s ... Read more
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