The Threat Of New Entrants

Economic analysis of a monopolistically competitive industry is more complicated than that of pure competition because:

Competition is prevalent in various aspects of life, including sports, school, and jobs. Everyone at some point in their lifetime will have to compete against others in order to achieve a goal or earn a prize. It’s how the world has worked for a long time; it’s survival of the fittest and this minor competition between everyone is how we have continuously gotten smarter, faster, and stronger. Competition is necessary to a certain degree, but how much is too much? It’s definitely not a bad thing, and as long as there’s a healthy amount, it can be beneficial because it fosters self-improvement, and it will push people to go all out and try their absolute best.

The barrier to enter Biotechnology industry is high. The first barrier is the extensive requirements in funding coming from heavy expenditures in R&D, along with the risk of little to no returns or even heavy losses if the drug fails to reach the market. Regulatory environment partly contributes to the barrier as the new drug approval process can be time-consuming with relatively 89% of failure to pass through. The second barrier is specialization. Companies with knowledge in obscure diseases will enjoy low threat of new entrant for there are few experts in the field.

If it is easy for markets to enter the retail business, it will result in an increase of competition. However, there are factors that limit the threat of new businesses entering the market known as barriers to entry, consisting of obstacles that will make it much harder to enter the particular industry.

The threat of new entrants is high in the industry for three reasons: the industry is continually growing; there is no dominant firm; and, the barriers to entry are low. Consumer trends suggest that people chose fitness centres based on location rather than brand name, meaning switching costs are low . Low switching costs, a lack of government regulation, and the homogeneousness of services offered across the industry contribute to the low barriers to entry. The only current barrier to entry is the large capital investment required to open a facility. Because location is so important, rent and finding a suitable site for a fitness centre can be expensive. Although Club Train is a well-established successful

The threat of entry does not only depend on new entrants ' expectation of focal firms

The UK banking system is an Oligopoly because there are a small number of companies in the industry to allow barriers to be raised against the entry of new firms. ‘It’s important that we have to make sure there’s no banks too big to fail’ (article). Although in an oligopoly its known

The industry that I have chosen to analyze for this paper in the banking industry. The companies which I have selected to analyze are Bank of America & Southeastern Bank. Bank of America will represent as the example for the company who has acquired and merged with other banks, and Fresno Southeastern Bank will act as the example for the bank who has never merged with a larger bank in any form or has been acquired. Both these banks offer similar products to their customers, for checking and savings accounts to home and car loans. They both offer investment products as well. Bank of America has a lot more products on a larger scale due to the size of their company, and the mergers they have made over their history. They operate worldwide

One barrier to entry in a market is research and development. Heavy investment into research and development from large firms can deter other firms from entering into a market. Research and development also goes into developing new products

level of competition and prove a potential threat for the market share of SBI bank.

The sector offers a considerable barrier to new entrants due to the high capital required to establish a new bank. As banking is professional services type required high creditability, strong brand presence is the key obstacle for newcomers.

The threat of new entrants is low in the natural food industry. Economies of scale decrease long run average costs which generate lower prices for customers and give a firm the ability to expand. Significant economies of scale for the natural food markets, including Whole Foods, are high, with the ability to create large volumes with low costs. The barrier for both entering into and exiting from the industry are strong. Entry to the natural food markets is either supermarkets changing their corporate images or health retailers moving into supermarkets. The natural food industry is currently dominating, which expands through new store openings with an assertive approach in its founding years. Organic food markets diminished their expected comeback to increase volume by choosing from incumbents through mergers and acquisitions. It is doubtful for local farmers to become a strong force and enter the market individually since the majority is not willing to invest in getting authorization with the government. It is easier for major companies to enter the market because they can finance the kind of goods the consumers are looking for. Network externalities are strong while there is no impact in spite of government protection of incumbents on profitability.

Lately, the international financial integration has increased. Over the years, the world economy has witnessed an increase in the number of individuals and businesses using international banking services. In today’s competitive global economy banks have the option to solely service their home market, to export services to foreign markets, or to establish a presence in that market. Essentially, banks have two options of expanding their operations in foreign markets. They can either service foreign clients through their domestic offices or they can establish a presence in the foreign markets. In general, the reasons for bank internationalization in

To identify an appropriate strategy for a given industry one must look into the external and internal factors influencing the company. This Schnell Air report has been conceived with a triple objective in mind: to provide the Schnell Air Board with (i) a brief and compelling synthesis of Schnell Air’s competitive market environment overview since it entered the Innsbruck – Turin route in January 1997 as compared to prior to its entry, (ii) analyse the available data to establish the extent of predatory pricing strategies being plotted by the two existing duopolies – Air Turin and Innsbruck Air and (iii) by using a Game Theoretic approach model and highlight the affect of a 4th daily service on the same route given the

In Bangladesh there are 30 private commercial banks and 10 number foreign commercial banks operating their business. I took 21 commercial banks as sample for my study. Because these 21 banks are