Barriers to Entry

List as many barriers to entry

Economies of scale, Brand loyalty, geographical , patents, first mover advantage, limit pricing, predatory pricing, vertical integration, knowledge of market/ expertise, network effects

Vertical integration

When a firm controls several stages of the supply chain

Economies of scale

Cost advantages gained by producing on a large scale.

Brand loyalty

Customer preference towards a specific brand.

Geographical barriers

Restrictions on market entry due to limited availability of resources in certain locations.

Patents

Legal protection granted to inventors that prevents others from recreating and distributing their invention for 20 years

First mover advantage

The advantage gained by being the first company to enter a market, often leading to market dominance.

Limit pricing

Setting prices at a low level to discourage new entrants from entering the market.

Predatory pricing

When a powerful firm sets prices too low for competitors to operate (usually below the cost of production - illegal).

Knowledge of market/expertise (and how its a barrier of entry)

Having specialised knowledge of how a market works, making it difficult for new entrants to compete

Network effects

The phenomenon where the value of a product or service increases as more people use it, making it harder for new entrants to attract customers.