barriers to entry

Factors that prevent competitors from entering a particular market. These factors may be innocent, e. g. an absolute cost advantage on the part of the firm that dominates the market, or deliberate, such as high spending on advertising to make it very expensive for new firms to enter the market and establish themselves. Other entry barriers may result from a firm's technological advantage, often protected by patents, or from a firm's existing access to end users as a result of its control of the distribution network. Barriers to entry reduce the level of competition in a market, i. e. they make it less contestable, thereby by enabling incumbents to charge higher-than-competitive prices. See also limit priceIf a particular market for a product is dominated by a large multinational corporation, barriers to entry for smaller firms may be formidable: the multinational may be able to produce the product more cheaply because of economies of scale, the existing product may have built up a strong brand loyalty, the multinational may control the supply of raw material, or own the patent rights to all or part of the production process.

Big dictionary of business and management. 2014.

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  • barriers to entry — See entry barriers. Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010 …   Law dictionary

  • Barriers to entry — Competition law Basic concepts History of competition law Monopoly Coercive monopoly Natural monopoly …   Wikipedia

  • Barriers To Entry — The existence of high start up costs or other obstacles that prevent new competitors from easily entering an industry or area of business. Barriers to entry benefit existing companies already operating in an industry because they protect an… …   Investment dictionary

  • barriers to entry — Restrictions on the entry of new competitors into a *market. Barriers to entry may result from technical and economic factors. For example, the large scale investment in machinery needed for some production processes may be beyond the economic… …   Auditor's dictionary

  • Barriers to entry — Zugangsbeschränkungen bzw. Barriers to entry (auch Eintrittsbarrieren, Zugangsbarrieren) nennt Michael E. Porter in seinem Buch Competitive Strategy diejenigen Faktoren, die Neuzugänge also neue Konkurrenten zu einem Wirtschaftssektor (engl.… …   Deutsch Wikipedia

  • Barriers to exit — In economics, barriers to exit are obstacles in the path of a firm which wants to leave a given market or industrial sector. These obstacles often cost the firm financially to leave the market and may prohibit it doing so. If the barriers of exit …   Wikipedia

  • Entry (economics) — In economics, entry into a market means becoming a supplier of goods or services. Monopolies have an incentive to create barriers to entry …   Wikipedia

  • entry barriers — Factors which impede or deter a new competitor from entering a particular market, such as ownership of intellectual property rights, high investment costs (particularly if such costs cannot be recovered on exit from the market) or the need to… …   Law dictionary

  • entry barrier — UK US noun [C, usually plural] (also barrier to entry) ► something that prevents a company from starting activities in a particular industry: »The internet is a very competitive place to do business, with low entry barriers …   Financial and business terms

  • entry — noun 1 right to enter sth ADJECTIVE ▪ free ▪ The club offers free entry to women on Thursdays. ▪ college, school, university (esp. BrE) VERB + ENTRY …   Collocations dictionary

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