Barriers To Entry
The existence of high start-up costs or other obstacles that prevent new competitors from easily entering an industry or area of business. Barriers to entry benefit existing companies already operating in an industry because they protect an established company's revenues and profits from being whittled away by new competitors. Investopedia Says:
Barriers to entry can exist as a result of government intervention (industry regulation, legislative limitations on new firms, special tax benefits to existing firms, etc.), or they can occur naturally within the business world. Some naturally occurring barriers to entry could be technological patents or patents on business processes, a strong brand identity, strong customer loyalty or high customer switching costs. Related Terms:
Brand Awareness
Brand Equity
Economic Moat
Economies Of Scale
First Mover
Patent
Perfect Competition
Porter's 5 Forces
Switching Costs
Value Proposition |