Barriers to entry definition
What is the definition of "barriers to entry"?
Barriers to entry are those conditions that make it difficult for a business to enter a particular market segment against existing competitors. Here are some typical barriers to entry:
- Capital requirements
- Government policies or regulations
- Intellectual property such as technology, patents, trademarks and trade secret
- Brand identity or other customer loyalty
- Time for development
- Economies of scale
- Geographic location of the incumbents
- Inelastic demand
- Aggressive competitive price in defensive situations
- Vertical integration of the incumbents
A business or marketing plan should identify barriers to entry and addresses strategies to deal with each one.
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