With the Use of Examples Explain the Various Barriers to Entry to a Market and How These Barriers Might Affect Market Structure

Firms trying to enter the market find it very difficult to compete against the kind of control that the top four companies have over this industry. Another example of an entry barrier is technology (Topher). The major companies in this industry are constantly developing new products, which makes it almost impossible for a new firm to come up with its own special product (Topher). The huge amount of money required for advertising is a final barrier faced by entering firms (Joy).

Threat of entry is low because it requires large capital investments for a firm to startup and thus it can impede the entry of new firms into the industry. Lastly, it would be hard to break into the industry because the other firms already have economies to scale, are further along learning curve, and may have certain airspace leases that blocks out the new company from potential routes.

Both potential and existing competitors influence average industry profitability. The threat of new entrants is usually based on the market entry barriers. They can take diverse forms and are used to prevent an influx of firms into an industry whenever profits, adjusted for the cost of capital, rise above zero. In contrast, entry barriers exist whenever it is difficult or not economically feasible for an outsider to replicate the incumbents’ position (Porter, 1980b; Sanderson, 1998) The most common forms of entry barriers, except intrinsic physical or legal obstacles, are as follows:

Threat of New Entrants - The easier it is for new companies to enter the industry, the more cutthroat competition there will be. Factors that can limit the threat of new entrants are known as barriers to entry. Some examples include:

Factors that can limit the threat of new entrants are known as barriers to entry. In this case barriers to entry are low because: there is no government intervention to prevent businesses from entering the industry, resources are abundant, and customers’ switching costs are low as well as fixed costs to start this type of business.

Barriers to entry - Sunk cost, technology, economies of scale, limiting pricing and brand loyalty of incumbents can all be barriers

* Barriers to Entry. A number of factors allow a pharmaceutical manufacturer to act as a

Threat to new entrants: There is no barrier to entry in this industry but it might be difficult for newcomers to compete against existing well establishing companies.

Barriers to Entry: The entry barriers in the market are relatively low, making it easy to access. However, as the market is saturated it could be unlikely for new companies to decide to start new enterprises in this field.

Barriers to Entry. In general, a monopoly by one company possesses the power to create barriers to entry for competing companies in a

Another quality of perfect competition that may be overlooked, but is vital to this industry is the ease of entry into the market. Start-up franchises within this market structure can begin operating with relatively low initial investments (compared to other industries). This is not the case where monopolies are concerned. There are numerous barriers to entry into monopolistic market structures, capital being one of the most prominent barriers.

Barriers to entry- there can either be high barriers to entry which makes the market unattractive and hard for new entrants or there can be low barriers to enter which make it easy for new entrants in the market.

In this case some big companies dominate the whole industry and as a result the small companies

Again, with high entry barriers they are not bombarded with other firms coming and going from their market. (Samuelson and Marks, 2010).

2. Barriers to entry in the mobile phone industry is high because any new entrants will need high investments in R&D, capital investment, technological investment and marketing in order to compete with the established organisations