MGT Notes

Reference: Strategic Management (5e) – Frank T. Rothaermel (Pg 84)

As we looked at in the previous post, an industry’s profit potential is hampered by the threat of new entrants. Higher the profitability of an industry, the more attractive it is for new firms. Entry barriers represent obstacles and are advantageous to incumbents. They can benefit from the following types of barriers: Economies of scale, Network Effects, Customer Switching Costs, Capital Requirements, Advantages independent of size, Government Policy and Credible Threat of Retaliation.

In the upcoming posts we will look at each in detail.