THE BARRIERS TO ENTRY IN OUR INDUSTRY

Barriers to entry are circumstances particular to a given industry that create disadvantages for new competitors attempting to enter the market. There are many barriers to entry in this industry such as deterring competitors from entering the market. These may include:
• Internal capabilities
• Government regulations
• Intellectual barriers
• Economic and market conditions
• Competitors reaction

Barriers to entry almost exist and almost anything can serve as a barrier to entry. In fact, the difficulties related to new product development, a patent owned by a competitor, high upstart costs, or unstable economic conditions.

Figure 1.0 Barrier to Market Entry

Economic conditions include a cost of supplying or marketing and selling to consumer which must be borne by a company which seeks to enter an industry but is not borne by firms already in the industry. They emphasize the irregularity in costs between the company already inside the market and the potential competitor. The existing businesses might have developed a cost advantage over potential entrants due to their economies of scale. For example, our company as a tools supplier for construction will influence and compete with others hardware shop which they will divergence and shrinking the price in other to have the best marketing.

Competitor's reactions may take various forms of marketing warfare. For instance, current supply company may rigid approach barriers and cut prices if and when new suppliers enter the market, moving away from short run profit maximization objectives – but designed to inflict losses on new company and protect their market position in the long run.

Government policy or regulation will be one of the barriers that can influence the growth of the company. The government policy either will help in growth of the company or will overriding the idea and act as a barriers to entry in this industry.