How can high R&D costs affect a company's entry into a new market?

High R&D costs can significantly affect a company's entry into a new market. These costs are considered as a barrier to entry because they require a significant upfront investment. This can deter companies from entering the market, especially if they are unsure of the potential return on their investment. Additionally, high R&D costs can also lead to higher product prices, which may not be competitive in the new market. Therefore, companies need to carefully consider and manage their R&D costs when planning to enter a new market.

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Use this slide to list all artificial (strategic) and natural entry barriers. These include high set-up and high R&D costs, predatory pricing, network effects, ownership or control and other barriers. With this slide, share your knowledge and data about barriers to exit. These barriers include highly specialized assets and high exit costs: asset write-offs and closure costs and the loss of customer goodwill. Populate this slide with examples of entry and exit barriers backed up by quantitative data to support your findings. We included analysis of entry and exit barriers for Amazon's rival, Alibaba, below.

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Entry and Exit Barriers

How do you pass market entry barriers? What do you need to know about market barriers to have a solid exit strategy for your business? Conduct extensi...

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