What are some examples of artificial and natural entry barriers in business?

Artificial entry barriers in business include strategic actions by incumbent firms designed to discourage or prevent potential entrants. Examples include predatory pricing, exclusive agreements with suppliers or distributors, and heavy upfront investment in advertising and customer acquisition. Natural entry barriers, on the other hand, arise from the inherent characteristics of the industry. Examples include high setup and R&D costs, network effects, and ownership or control of key resources. For instance, in industries with high fixed costs like utilities or airlines, the high cost of infrastructure can be a significant barrier to entry. Similarly, in technology industries, network effects can create a barrier where the value of the product or service increases with the number of users, making it difficult for new entrants to compete.

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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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