Barriers to Entry

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Description of Barriers to Entry. Explanation.




Definition Barriers to Entry. Description.

Barriers to Entry are obstacles to the entry into a market for new firms. These obstacles may take various forms. They may include:

  • Technical barriers.

  • Legal barriers, government regulations and other restrictive practices.

  • Very low pricing (selling below cost price).

  • Strong branding, advertising and customer loyalty by/for the existing competitors.

  • Patents and other intellectual property rights.

  • High Research and development costs

  • Cost advantages through economies of scale.

  • Distributor agreements and Supplier agreements which give exclusivity.

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