Barriers to entry
Also called: entry barriers, barrier to entry
Whatever makes it hard for new competitors to enter an industry, such as scale, licences, brands, distribution networks or technology.
Where barriers are high, profitable companies can keep their profits for longer. Where they are low, high profits attract new entrants who add capacity and cut prices until returns fall to ordinary levels.
Learn more in these lessons
- Industry analysis and competitive positioningHow does an industry's structure affect the profits its companies can earn?
- Competitive advantages and their limitsWhat protects a company from its competitors, and how can you tell?
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