4 barriers to entry and competitive advantage
Not what you're looking for?
In today's competitive market, it becomes difficult for firms to enter and be profitable. It has been established that with established barriers to entry a firm might have the possibility to set up a business and become profitable.
Describe 4 barriers to entry and explain how they can help a firm get the competitive edge.
Purchase this Solution
Solution Summary
This posting looks at 4 elements: Economies of scale, Capital investment, Access to supply and demand channels and Learning curve and explains how it is related to barriers to entry, and how it can give a firm a competitive advantage.
Solution Preview
Firstly, barrier to entry is defined as factors that make it difficult for new firms to enter an industry. Thus, if it is difficult to enter then less people will actually try to establish businesses in this market, thus competition is low. On the flip side, if there are no barriers to entry, anyone can establish a new business, which means that there will be high competition.
a) Economies of scale
The more products are produced, the cheaper the cost per unit becomes. For example, a firm making computer chips might enjoy an economy of scale. The more microprocessors they produce, the cheaper the unit price becomes. In essence, it is very hard to establish a NEW business that has economies of scale because the industry might not have ...
Purchase this Solution
Free BrainMass Quizzes
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations
Business Ethics Awareness Strategy
This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.
Motivation
This tests some key elements of major motivation theories.
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.
Understanding Management
This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.